Military Bases: Analysis of DOD's 2005 Selection Process and	 
Recommendations for Base Closures and Realignments (01-JUL-05,	 
GAO-05-785).							 
                                                                 
On May 13, 2005, the Secretary of Defense submitted proposed base
realignment and closure (BRAC) actions to an independent	 
commission for its review. The Commission must submit its	 
recommendations to the President by September 8, 2005, for his	 
acceptance or rejection in their entirety. Congress has final	 
action to accept or reject these recommendations in their	 
entirety later this year. The law requires that GAO issue a	 
report on the Department of Defense's (DOD) recommendations and  
selection process by July 1, 2005. GAO's objectives were to (1)  
determine the extent to which DOD's proposals achieved its stated
BRAC goals, (2) analyze whether the process for developing	 
recommendations was logical and reasoned, and (3) identify issues
with the recommendations that may warrant further attention. Time
constraints limited GAO's ability to examine implementation	 
details of most of the individual recommended actions.		 
-------------------------Indexing Terms------------------------- 
REPORTNUM:   GAO-05-785 					        
    ACCNO:   A28778						        
  TITLE:     Military Bases: Analysis of DOD's 2005 Selection Process 
and Recommendations for Base Closures and Realignments		 
     DATE:   07/01/2005 
  SUBJECT:   Base closures					 
	     Base realignments					 
	     Cost analysis					 
	     Defense cost control				 
	     Financial analysis 				 
	     Internal controls					 
	     Military bases					 
	     Military facilities				 
	     Military policies					 
	     Performance measures				 
	     Policy evaluation					 
	     Strategic planning 				 
	     DOD Base Realignment and Closure Program		 

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GAO-05-785

                 United States Government Accountability Office

                     GAO Report to Congressional Committees

July 2005

MILITARY BASES

 Analysis of DOD's 2005 Selection Process and Recommendations for Base Closures
                                and Realignments

                                       a

GAO-05-785

[IMG]

July 2005

MILITARY BASES

Analysis of DOD's 2005 Selection Process and Recommendations for Base Closures
and Realignments

  What GAO Found

DOD had varying success in achieving its 2005 BRAC goals of (1) reducing
excess infrastructure and producing savings, (2) furthering
transformation, and (3) fostering jointness. While DOD proposed a record
number of closures and realignments, exceeding all prior BRAC rounds
combined, many proposals focused on reserve bases and relatively few on
closing active bases. Projected savings are almost equally large, but most
savings are derived from 10 percent of the recommendations. While GAO
believes savings would be acheived, overall up-front investment costs of
an estimated $24 billion are required, and there are clear limitations
associated with DOD's projection of nearly $50 billion in savings over a
20-year period. Much of the projected net annual recurring savings (47
percent) is associated with eliminating jobs currently held by military
personnel. However, rather than reducing end-strength levels, DOD
indicates the positions are expected to be reassigned to other areas,
which may enhance capabilities but also limit dollar savings available for
other uses. Sizeable savings were projected from efficiency measures and
other actions, but underlying assumptions have not been validated and
could be difficult to track over time. Some proposals represent efforts to
foster jointness and transformation, such as initial joint training for
the Joint Strike Fighter, but progress in each area varied, with many
decisions reflecting consolidations within, and not across, the military
services. In addition, transformation was often cited as support for
proposals, but it was not well defined, and there was a lack of agreement
on various transformation options.

DOD's process for conducting its analysis was generally logical, reasoned,
and well documented. DOD's process placed strong emphasis on data,
tempered by military judgment, as appropriate. The military services and
seven joint cross-service groups, which focused on common businessoriented
functions, adapted their analytical approaches to the unique aspects of
their respective areas. Yet, they were consistent in adhering to the use
of military value criteria, including new considerations introduced for
this round, such as surge and homeland defense needs. Data accuracy was
enhanced by the required use of certified data and by efforts of the DOD
Inspector General and service audit agencies in checking the data.

Time limitations and complexities introduced by DOD in weaving together an
unprecedented 837 closure and realignment actions across the country into
222 individual recommendations caused GAO to focus more on evaluating
major cross-cutting issues than on implementation issues of individual
recommendations. GAO identified various issues that may warrant further
attention by the Commission. Some apply to a broad range of
recommendations, such as assumptions and inconsistencies in developing
certain cost and savings estimates, lengthy payback periods, or potential
impacts on affected communities. GAO also identified certain candidate
recommendations, including some that were changed by senior DOD leadership
late in the process that may warrant attention.

United States Government Accountability Office

Contents

  Letter

Results in Brief
Background
DOD's Recommendations Would Have Varying Degrees of Success

in Achieving Goals for the 2005 BRAC Round
DOD Developed a Generally Logical and Reasoned Process for
Making BRAC Decisions
Several Aspects of DOD's BRAC Recommendations and Rejected

Proposals May Warrant Further Attention
Conclusions
Recommendation for Executive Action
Agency Comments

1 4 7

17

30

40 56 57 57

Appendixes

                                                                  Appendix I:
                                                                 Appendix II:
                                                                Appendix III:

Appendix IV:

Appendix V:

Appendix VI:

Appendix VII:

Appendix VIII:

Appendix IX:

Appendix X:

Appendix XI:

Appendix XII:

Scope and Methodology 61

Glossary of BRAC-Related Terms 66

The Department of the Army Selection Process and
Recommendations 69

The Department of the Navy Selection Process and
Recommendations 92

The Department of the Air Force Selection Process and
Recommendations 111

Education and Training Joint Cross-Service Group Selection
Process and Recommendations 131

Headquarters and Support Activities Joint Cross-Service
Group Selection Process and Recommendations 145

Industrial Joint Cross-Service Group Selection Process and
Recommendations 166

Intelligence Joint Cross-Service Group Selection Process
and Recommendations 185

Medical Joint Cross-Service Group Selection Process and
Recommendations 193

Supply and Storage Joint Cross-Service Group Selection
Process and Recommendations 207

Technical Joint Cross-Service Group Selection Process and
Recommendations 219

                                    Contents

Appendix XIII: Cost of Base Realignment Actions Model 237

Appendix XIV: Economic Impact Assessments 244

Appendix XV:	Draft DOD Transformational Options Recommended for Approval
254

Appendix XVI:	Key GAO and Other Defense Audit Agency Products Related to
DOD's 2005 Base Realignments and Closures 262

Appendix XVII: GAO Contact and Staff Acknowledgments 265

Tables	Table 1: Table 2:

Table 3: Table 4:

Table 5:

Table 6:

Table 7:

Table 8: Table 9:

Comparison of BRAC 2005 with Previous Rounds
Projected Costs and Savings from BRAC 2005
Recommendations
Major Recommendations Supporting Joint Activity
Payback Periods for BRAC Recommendations by DOD
Component
Estimated Environmental Restoration Costs for DOD's
Recommended Major Base Closures
Military Installations That Would Receive a Net Gain of
Over 2,000 Personnel due to BRAC Actions
Candidate Recommendations That Were Deleted or
Significantly Revised by the Infrastructure Executive
Council
Excess Capacity Identified by the Army for Selected
Mission Areas
Army Military Value Criteria Weights

                                       18

                                     20 28

                                       41

                                       46

                                       50

                                       53

                                                           73 75 79 95 97 102

108

                                    114 115

                                      120

                                      125

                                      129

Table 10: Financial Aspects of the Army's Recommendations
Table 11: Excess Capacity Identified by the Navy, by Function
Table 12: Navy Military Value Criteria Weights
Table 13: Financial Aspects of the Navy's Recommendations
Table 14: Comparison of Alternatives to Closing and Realigning

Naval Air Station Brunswick and Marine Corps Logistics Base Barstow Table
15: Excess Capacity Identified by the Air Force, by

Function Table 16: Air Force Military Value Criteria Weights Table 17:
Financial Aspects of the Air Force's

Recommendations Table 18: Impact of Air Force BRAC Recommendations on
Installations with Flying Missions, by Component Table 19: Comparison of
Alternatives to Closing or Realigning Grand Forks Air Force Base

Contents

Table 20: Excess Capacity Identified by the Education and Training
Joint Cross-Service Group 134
Table 21: Education and Training Joint Cross-Service Group Military
Value Criteria Weights 136
Table 22: Financial Aspects of the Education and Training Joint
Cross-Service Group's Recommendations 140
Table 23: Excess Capacity Identified by the Headquarters and
Support Activities Joint Cross-Service Group 147
Table 24: Headquarters and Support Activities Joint Cross-Service
Group Military Value Criteria Weights 149

Table 25: Financial Aspects of the Headquarters and Support
Activities Joint Cross-Service Group's
Recommendations 154

Table 26: Impact of One-time Antiterrorism and Force Protection
Savings on Recommendations Involving Leased Space 159
Table 27: Excess Capacity Identified by the Industrial Joint
Cross-Service Group 168
Table 28: Industrial Joint Cross-Service Group Military Value
Criteria Weights 170
Table 29: Financial Aspects of the Industrial Joint Cross-Service
Group's Recommendations 175
Table 30: Excess Capacity Identified by the Intelligence Joint
Cross-Service Group 187
Table 31: Intelligence Joint Cross-Service Group Military Value
Criteria Weights 188
Table 32: Financial Aspects of the Intelligence Joint Cross-Service
Group's Recommendations 191
Table 33: Excess Capacity Identified by the Medical Joint
Cross-Service Group 195
Table 34: Medical Joint Cross-Service Group Military Value Criteria
Weights 198
Table 35: Financial Aspects of the Medical Joint Cross-Service
Group's Recommendations 201
Table 36: Excess Capacity Identified by the Supply and Storage Joint
Cross-Service Group 209
Table 37: Supply and Storage Joint Cross-Service Group Military
Value Criteria Weights 210
Table 38: Financial Aspects of the Supply and Storage Joint
Cross-Service Group's Recommendations 214
Table 39: Excess Capacity Identified by the Technical Joint
Cross-Service Group 221

                                    Contents

Table 40: Technical Joint Cross-Service Group Military Value Criteria
Weights 222 Table 41: Financial Aspects of the Technical Joint
Cross-Service Group's Recommendations 226

Table 42: Comparison of Alternatives to Personnel Reductions for the
Recommendation to Create a Naval Integrated Weapons and Armaments
Research, Development and Acquisition, and Test and Evaluation Center 231

Table 43: Estimated Costs and Savings for the Rejected Closure of Los
Angeles Air Force Base 235 Table 44: Major Improvements to COBRA for the
BRAC 2005 Round 239 Table 45: Five Economic Areas with the Greatest
Negative Impact on Employment 252 Table 46: Five Economic Areas with the
Greatest Positive Economic Impact on Employment 252

Figures	Figure 1: Figure 2: Figure 3: Figure 4:

Figure 5:

Figure 6: Figure 7:

Figure 8:

Figure 9:

DOD's BRAC Leadership Structure
DOD's Selection Criteria for BRAC 2005 Round
DOD's BRAC 2005 Process
Major Base Closures with Plant Replacement Values
Exceeding $100 Million
Major Base Realignments with a Net Loss of 400 or More
Military and Civilian Personnel
Estimated Net Annual Recurring Savings
Analytical Process Leading to BRAC
Recommendations
Selected Attributes, Metrics, and Data Questions Used to
Assess Military Value for a Technical Facility
Selected Attributes, Metrics, and Data Questions Used to
Assess Military Value of an Army Installation

9 11 12

15

16 22

31

35

76

98

116

127

137

150

Figure 10: Selected Attributes, Metrics, and Data Questions Used to Assess
Military Value of Naval Aviation Operations

Figure 11: Selected Attributes, Metrics, and Data Questions Used to Assess
Military Value of Fighter Aircraft

Figure 12: Realignment of Fighter Aircraft at Lambert-St. Louis Air Guard
Station and Otis Air National Guard Base

Figure 13: Selected Attributes, Metrics, and Data Questions Used to Assess
Military Value of Flight Training

Figure 14: Selected Attributes, Metrics, and Data Questions Used to Assess
Military Value of Major Administrative and Headquarters Activities

Contents

Figure 15: Selected Attributes, Metrics, and Data Questions Used to Assess
Military Value of Depot Maintenance Activities 171

Figure 16: Selected Attributes, Metrics, and Data Questions Used to Assess
Military Value of an Intelligence Facility 189

Figure 17: Selected Attributes, Metrics, and Data Questions Used to Assess
Military Value of Health Care Services 199

Figure 18: Selected Attributes, Metrics, and Data Questions Used to Assess
Military Value of Supply and Storage Activities 211

Figure 19: Selected Attributes, Metrics, and Data Questions Used to Assess
Military Value of a Technical Facility 224

Abbreviations

BRAC base realignment and closure
COBRA Cost of Base Realignment Actions
DOD Department of Defense
DLA Defense Logistics Agency
IEC Infrastructure Executive Council
ISG Infrastructure Steering Group
OSD Office of the Secretary of Defense

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A

United States Government Accountability Office Washington, D.C. 20548

July 1, 2005

Congressional Committees

It has been 10 years since the Department of Defense (DOD) last conducted
a base realignment and closure (BRAC) round.1 As a result of prior BRAC
rounds in 1988, 1991, 1993, and 1995, DOD reports that it has reduced its
domestic infrastructure by about 20 percent in terms of plant replacement
value,2 transferred hundreds of thousand of acres of unneeded property to
other federal and nonfederal entities, and saved billions of dollars on an
annual recurring basis for application to higher priority defense needs.
Despite these infrastructure reductions, DOD recognized the need for
additional closures and realignments following the 1995 closure round and
made repeated efforts to gain congressional authorization for an
additional closure round.

We too have frequently reported in recent years on the long-term
challenges DOD faces in managing its portfolio of facilities, halting
degradation of facilities, and reducing unneeded infrastructure to free up
funds to better maintain enduring facilities and meet other needs. Because
of these long-standing issues, DOD's management of its support
infrastructure has been included in our list of high-risk areas since
1997.

Congress authorized an additional BRAC round for 2005 with the passage of
the National Defense Authorization Act for Fiscal Year 2002 (the Act).3
The 2002 Act essentially extended the authority of the Defense Base
Closure and Realignment Act of 1990,4 which had authorized the 1991, 1993,
and 1995 rounds, with some modifications for the 2005 base closure round.
The BRAC legislation provides for an independent Defense Base Closure and
Realignment Commission to review the Secretary of Defense's realignment
and closure recommendations, which were publicly announced on May 13,
2005, and present its findings and conclusions on the Secretary's
recommendations, along with its own recommendations to the

1 Definitions of closures and realignments and other BRAC-related terms
are included in app. II.

2 DOD defines plant replacement value as the cost to replace an existing
facility with a facility of the same size at the same location, using
today's building standards.

3 P.L. 107-107, Title XXX (Dec. 28, 2001).

4 P.L. 101-510, Title XXIX (Nov. 5, 1990); 10 U.S.C. 2687, note.

President, by September 8, 2005. The President, in turn, must either
approve or disapprove the Commission's recommendations in their entirety
by September 23, 2005. If approved, the recommendations are forwarded to
Congress, which has 45 days or until the adjournment of Congress to
disapprove the recommendations on an all-or-none basis; otherwise, they
become binding.5 If the President disapproves the recommendations, the
Commission must consider the President's objections and send a revised
report back to the President no later than October 20, 2005. The President
then has until November 7, 2005, to forward his approval of the revised
Commission recommendations to Congress for its review.

Considering changes in the national security environment and emerging
threats, along with ongoing changes in the United States defense strategy
to address these threats and protect our homeland, DOD has come to realize
the need to reshape its base structure to more effectively support its
military forces. In establishing goals for the 2005 BRAC round, the
Secretary of Defense, in a November 15, 2002, memorandum initiating the
round, expressed his interest in (1) reducing excess infrastructure, which
diverts scarce resources from overall defense capability, and producing
savings; (2) transforming DOD by aligning the infrastructure with the
defense strategy; and (3) fostering jointness by examining and
implementing opportunities for greater jointness across DOD.

In the submission of his recommendations to the BRAC Commission on May 13,
2005, the Secretary reported that his recommendations, if approved, would
accomplish these goals. DOD reported that its 222 recommendations,
involving an unprecedented 837 closure and realignment actions-including
33 major base closures and 30 major realignments, plus numerous other
closures and realignments would generate annual recurring savings of about
$5.5 billion beginning in fiscal year 2012.

Legislation authorizing the 2005 round maintained the requirement,
applicable to three previous rounds, that we provide a detailed analysis
of the Secretary's recommendations and the selection process. Our
objectives were to (1) determine the extent to which DOD achieved its
stated goals for BRAC 2005, (2) analyze whether DOD's selection process in
developing

5 Once the recommendations become binding, DOD must initiate closure or
realignment actions no later than 2 years and complete these actions
within 6 years from the date the President transmits his report to
Congress. P.L. 101-510, section 2904.

recommended actions was logical and reasoned, and (3) identify issues
regarding the recommendations that may warrant attention by the BRAC
Commission.

To analyze the selection process and the recommendations, we monitored
various aspects of the process as it evolved over time leading up to and
following the public release of the Secretary's recommendations. We sought
to assure ourselves that DOD followed a logical, reasoned, and
welldocumented decision-making process leading to the proposed
recommendations. Prior to the release of the recommendations, we abided by
an agreement with DOD not to disclose details of the process due to the
sensitivity of the information while the process evolved. With the
approval of the large number of recommendations occurring in the final
weeks of the process, the broad scope and complexity of the
recommendations, and the limited time available for us to report our
results, we generally focused greater attention following the announcement
of the proposed closures and realignments on those issues affecting more
than one recommendation than on issues pertaining to the implementation of
individual recommendations. However, as time permitted, we visited
selected installations to better gauge the operational and economic impact
of the proposed recommendations. We generally experienced good access to
relevant documentation and to key senior officials and staff involved in
the BRAC process.

We performed our work primarily at the Office of the Secretary of Defense
(OSD), the military services' base closure offices, and the offices of the
seven joint cross-service groups that were established by the Secretary to
propose cross-service recommendations.6 While we did not attend
deliberative meetings, we had access to minutes of meetings and relevant
documentation, as well as opportunities to meet periodically with senior
leadership to provide observations or concerns we had as the process was
unfolding. We relied on DOD's Office of the Inspector General, Army Audit
Agency, Naval Audit Service, and Air Force Audit Agency to validate the
accuracy of the data used by the military services and joint cross-service
groups in their decision-making process. We met with staff members of
these audit agencies periodically to discuss the results of their work as
well as to observe their data validation efforts at selected locations.
Based on these discussions and observations and a review of their reports,
we

6 The seven joint cross-service groups were Education and Training;
Headquarters and Support Activities; Industrial; Intelligence; Medical;
Supply and Storage; and Technical.

believe the DOD data are sufficiently reliable for the purposes of this
report. We conducted our work from October 2003, as DOD's process was
beginning, through June 2005, shortly after the Secretary of Defense
announced his proposed closures and realignments, in accordance with
generally accepted government auditing standards. Further details on the
scope and methodology are described in appendix I.

Results in Brief	DOD's recommendations, if approved, would have varying
degrees of success in achieving goals that were set forth by the Secretary
of Defense, despite producing closure and realignment actions numbering
more than those of all four previous rounds combined. The department's
recommendations were dominated by relatively minor closures and
realignments, and many were related to the reserve components.7 DOD data
indicate that implementing the proposed recommendations would reduce the
defense infrastructure by about 5 percent based on the facilities' plant
replacement value. We believe the recommendations overall, if approved,
would produce savings. However, overall up-front investment costs of an
estimated $24 billion are required, and there are limitations associated
with DOD's projection of nearly $50 billion in net present value savings
over a 20-year period.8 Most projected savings are derived from 10 percent
of the 222 recommendations. Also, much of the projected net annual
recurring savings (47 percent) are associated with eliminating jobs
currently held by military personnel. However, rather than reducing
endstrength levels, DOD indicates the positions are expected to be
reassigned to other areas, which may enhance capabilities but also limit
dollar savings available for other uses. Without recognition that these
are not dollar savings that can be readily applied elsewhere, this could
create a false sense of savings available for other purposes. Furthermore,
about $500 million of the net annual recurring savings is based on
business process reengineering efforts, but some of the assumptions
supporting the expected efficiency gains have not been validated; while
savings are likely to be realized, the precise magnitude of savings is
uncertain. For example, one of DOD's recommendations-to create fleet
readiness centers in the

7 The reserve components consist of the Army National Guard of the United
States, the Army Reserve, the Naval Reserve, the Marine Corps Reserve, the
Air National Guard of the United States, the Air Force Reserve, and the
Coast Guard Reserve.

8In the context of BRAC, net present value is taking into account the time
value of money in calculating the value of future cost and savings.

Navy by integrating different levels of maintenance to reduce repair time-
is estimated to yield $215 million in annual recurring savings as a result
of overhead efficiencies, but such assumptions have not been validated and
actual savings will be shaped by how the recommendations are implemented.
We have previously reported on limitations in DOD's efforts to track and
update savings from prior BRAC rounds. Our concerns over this issue are
heightened in this BRAC round, with the emphasis on business process
reengineering efforts, because of past tendencies to reduce related
operating budgets in advance of actual savings being known and fully
realized. While DOD characterized many of its recommendations as
transformational-whereby infrastructure would be aligned with the defense
strategy-we found that the concept of transformation is not well defined,
and many of the recommendations referencing it as support for the proposed
BRAC actions are more appropriately categorized as efforts to improve
business processes. Some proposed actions increase emphasis on jointness,
such as establishing a single site for initial training for the Joint
Strike Fighter aircraft. However, the extent of joint and transformational
progress varied, as shown by other DOD-proposed actions reflecting
preferences to consolidate functions within rather than across services,
and by a lack of agreement on transformational options despite frequent
references to them in support of proposed actions. We are making a
recommendation to the Secretary of Defense to establish mechanisms for
tracking and periodically updating savings estimates as the BRAC
recommendations are implemented.

DOD's decision-making process for developing its recommendations was
generally logical, well documented, and reasoned. DOD established a
structured and largely sequential process for obtaining and analyzing data
that provided an informed basis for identifying and evaluating BRAC
options. At the same time, initial difficulties in obtaining complete and
accurate data in a timely manner often added to overlap and varying
degrees of concurrency between data collection efforts and other steps in
the process. That notwithstanding, DOD's process relied on certified
data,9 as required by the BRAC legislation, and the use of various
analytical models to evaluate the data. Further, as the military services
and joint cross-service groups assessed the importance of installations,
facilities, and functions, they were consistent in following the key
considerations set

9 During the BRAC process, data were certified by senior officials at DOD
installations. Each official certified that the information was accurate
and complete to the best of his or her knowledge and belief.

forth in the BRAC law-such as military value-although they varied somewhat
in their analytical approaches based on unique aspects of the functions
being evaluated. As Congress mandated, DOD updated and considered its
20-year force structure plan in completing its BRAC analysis.10 Further,
DOD focused on the military value selection criteria as the predominant
decision-making factor, including legislatively mandated emphasis for this
BRAC round on such elements as homeland defense and surge capability.
Military judgment also played a role throughout the process. While the
effort to ensure the accuracy of the voluminous amounts of data used in
the process proved challenging for the services and joint cross-service
groups, the DOD Inspector General and the military service audit agencies
played key roles in pointing out data limitations, fostering corrections,
and improving the accuracy of the data used in the process through their
validation efforts, and generally found the data sufficiently reliable to
support BRAC decision making.

We identified various issues regarding DOD's BRAC recommendations, as well
as candidate recommendations11 that were not included on DOD's final list
that may warrant further attention by the BRAC Commission. These issues
include instances of lengthy payback periods, which is the time required
to recoup up-front investment costs for closing or realigning a facility
or function; inconsistencies in formulating cost and savings estimates;
uncertainties in estimating total costs to the government for implementing
recommended actions; and potential impacts on communities surrounding
bases that are either losing or gaining large numbers of personnel. With
respect to the latter issue, this BRAC round differs from prior rounds in
that many communities will be facing increased growth with the return of
thousands of forces from overseas locations and the consequent challenges
of addressing increased needs in areas such as schools and housing. In a
few instances, we identified implementation or operational issues related
to some recommendations. We are also highlighting specific closure or
realignment actions that were projected as having the potential to
generate significant savings that the services or joint cross-service
groups approved for further consideration,

10 P.L. 101-510, section 2912(a)(1)(A) required DOD to develop a 20-year
force structure plan as the basis for its BRAC analysis.

11 Candidate recommendations refer to proposed recommendations that were
approved by either the military services or joint cross-service groups and
forwarded for review to DOD's Infrastructure Steering Group and
Infrastructure Executive Council.

but which were either deleted or substantially revised by senior DOD
leadership during the latter phases of the selection process.

In providing oral comments on a draft of this report, DOD concurred with
the recommendation regarding the need for a system to track and
periodically update BRAC savings estimates.

Background	As described at the beginning of this report, DOD recognized
the need for additional base closures and realignments following the 1995
closure round and made repeated efforts to gain congressional
authorization for an additional closure round. Congress authorized an
additional round for 2005 with the passage of the National Defense
Authorization Act for Fiscal Year 2002.12 The 2002 Act essentially
extended the authority of the Defense Base Closure and Realignment Act of
1990,13 which had authorized the 1991, 1993, and 1995 rounds, with some
modifications for the 2005 base closure round.

In a memorandum dated November 15, 2002, the Secretary of Defense issued
initial guidance outlining goals and a leadership framework for the 2005
BRAC round. In doing so, he noted that "At a minimum, BRAC 2005 must
eliminate excess physical capacity; the operation, sustainment and
recapitalization of which diverts scarce resources from defense
capability." However, specific reduction goals were not established.14 At
the same time, the Secretary's guidance for the 2005 round depicted the
round as focusing on more than the reduction of excess capacity. He said
that "BRAC 2005 can make an even more profound contribution to
transforming the Department by rationalizing our infrastructure with
defense strategy." He further noted that "A primary objective of BRAC
2005, in addition to realigning our base structure to meet our post-Cold
War force structure, is to examine and implement opportunities for greater
joint activity." Toward that end, the Secretary indicated that
organizationally the 2005 BRAC

12 P.L. 107-107, Title XXX (Dec. 28, 2001).

13 P.L. 101-510, Title XXIX (Nov. 5, 1990); 10 U.S.C. 2687 note.

14 This contrasts with secretarial guidance issued in January 1994,
initiating the 1995 BRAC round, which established the goal of reducing
domestic base structure by a minimum of 15 percent of DOD-wide plant
replacement value. The Secretary of Defense indicated in a March 2004
report to Congress that DOD likely had about 24 percent excess facility
capacity going into the 2005 BRAC round.

analysis would be two pronged. Joint cross-service teams would analyze
common business-oriented functions, and the military departments would
analyze service-unique functions.

The Secretary of Defense established two senior groups to oversee and
guide the BRAC 2005 process from a departmental perspective. The first was
the Infrastructure Executive Council (IEC), which was designated the
policy-making and oversight body for the entire process, and the second, a
subordinate group, was the Infrastructure Steering Group (ISG), created to
oversee the joint cross-service analyses and integrate that process with
the military departments' own service-unique analyses. Each of the
military departments also established BRAC organizations, which had
oversight from senior leaders. Likewise, each of the joint cross-service
teams, under the purview of the ISG, was led by senior military or
civilian officials, with representation from each of the services and
relevant defense agencies. DOD's BRAC leadership structure is shown in
figure 1.

actions being considered.15 (See app. XV for a list of the draft
transformational options.) To some extent, the analyses and
recommendations of each of the services and joint cross-service groups
were also influenced by various guiding principles or policy imperatives
developed by the respective service or joint cross-service groups, such as
the need to preserve a particular capability in a particular location.

The legislation authorizing the 2005 BRAC round, enacted as part of the
fiscal year 2002 Defense Authorization Act, required DOD to give priority
to selection criteria dealing with military value and added elements of
specificity to criteria previously used by DOD in prior BRAC rounds.
Subsequently, The Ronald W. Reagan National Defense Authorization Act for
Fiscal Year 200516 codified the entire selection criteria and added the
word "surge" to one previously used criterion related to potential future
contingencies and mobilization efforts. In large measure, the final
criteria closely followed the criteria DOD employed in prior rounds, with
greater specificity added in some areas, as required by Congress. Figure 2
shows DOD's selection criteria for 2005, with changes from BRAC 1995
denoted in bold.17

15 DOD broadly defines transformation as "a process that shapes the
changing nature of military competition and cooperation through new
combinations of concepts, capabilities, people and organizations that
exploit our nation's advantages and protect against asymmetric
vulnerabilities to sustain our strategic position, which helps underpin
peace and stability in the world." Examples of draft transformational
options included (1) consolidate management at installations with shared
boundaries and (2) establish regional cross-service and cross-functional
ranges that will support service, collective, interoperability, and joint
training, as well as test and evaluation of weapon systems.

16 P.L. 108-375, section 2832 (Oct. 28, 2004).

17 In this report, we refer to the selection criteria by the numbering
method used by DOD instead of the specific statutory provisions detailing
these criteria as contained in P.L. 101510, section 2913.

Figure 2: DOD's Selection Criteria for BRAC 2005 Round

o  Military value criteria.

1. The current and future mission capabilities and the impact on
operational readiness of the total force of the Department of Defense,
including the impact on joint warfighting, training, and readiness.

2. The availability and condition of land, facilities, and associated
airspace (including training areas suitable for maneuver by ground, naval,
or air forces throughout a diversity of climate and terrain areas and
staging areas for the use of the Armed Forces in homeland defense
missions) at both existing and potential receiving locations.

3. The ability to accommodate contingency, mobilization, surge, and future
total force requirements at both existing and potential receiving
locations to support operations and training.

4. The cost of operations and the manpower implications.

o  Other criteria.

5. The extent and timing of potential costs and savings, including the
number of years, beginning with the date of completion of the closure or
realignment, for the savings to exceed the costs.

6. The economic impact on existing communities in the vicinity of military
installations.

7. The ability of the infrastructure of both the existing and potential
receiving communities to support forces, missions, and personnel.

8. The environmental impact, including the impact of costs related to
potential environmental restoration, waste management, and environmental
compliance activities.

Source: DOD and P.L. 101-510, section 2913.

Note: Bolding denotes changes from the 1995 BRAC round.

To ensure that the selection criteria were consistently applied, OSD
established a common analytical framework to be used by each military
service and joint cross-service group. Each service and group adapted this
framework, in varying degrees, to its individual activities and functions
in evaluating facilities and functions and identifying closure and
realignment options. Despite the diversity of bases and cross-service
functions analyzed, each of the groups was expected to first analyze
capacity and military value of its respective facilities or functions, and
then to identify and evaluate various closure and realignment scenarios
and provide specific recommendations. Scenarios were derived from data
analysis and transformational options, as well as from goals and
objectives each group established for itself as it began its work. Figure
3 depicts the expected progression of that process.

Figure 3: DOD's BRAC 2005 Process

Source: DOD.

An initial part of the process involved an overall capacity analysis of
specific locations or functions and subfunctions at specific locations.
The analysis relied on data calls to obtain certified data to assess such
factors as maximum potential capacity, current capacity, current usage,
excess capacity, and capacity needed to meet surge requirements.

The military value analysis consisted of assessments of operational and
physical characteristics of each installation, or specific functions on an
installation related to a specific joint cross-service group's area of
responsibility. These would include an installation's or function's
current and future mission capabilities, physical condition, ability to
accommodate future needs, and cost of operations. This analysis also
relied on data calls to obtain certified data on the various attributes
and metrics used to assess each of the four military value criteria and
permit meaningful comparisons between like installations/facilities with
reference to the collective military value selection criteria. DOD
officials used these data to develop comparative military value scores for
each installation/facility or for categories of facilities serving like
functions.

The scenario development and analysis phase focused on identifying various
realignment and closure scenarios for further analysis. These scenarios
were to be derived from consideration of the department's 20year force
structure plan, capacity analysis, military value analysis, and
transformational options; applicable guiding principles, objectives, or
policy imperatives identified by individual military services or joint
crossservice groups; and military judgment. Each component had available
for its use an optimization or linear programming model that could combine
the results of capacity and military value analyses and other information
to derive scenarios and sets of alternatives. The model could be used to
address varying policy imperatives or objectives, such as minimizing the
number of sites, minimizing the amount of excess capacity, or maximizing
the average military value. A BRAC review group could also direct

variations that would, for example, eliminate as much excess capacity as
possible while maintaining an average military value at least as high as
the original set of sites.

OSD policy guidance has historically specified that priority consideration
be given to military value in making closure and realignment decisions,
but that priority was specifically mandated by the legislation authorizing
the 2005 BRAC round. At the same time, historic practice and the 2005
authorizing legislation both required consideration of additional issues
included in selection criteria 5 through 8, detailed below:

o 	Criterion 5-costs and savings: This criterion consists of measures of
costs and savings and the payback periods18 associated with them. Each
component assessed costs using the Cost of Base Realignment Actions
(COBRA) model that was used in each of the BRAC rounds since 1988.
Appendix XIII summarizes improvements that have been made to the model
over time and more recently for the 2005 round.

o 	Criterion 6-economic impact: This criterion measures the direct and
indirect impacts of a BRAC action on employment in the communities
affected by a closure or realignment. Appendix XIV provides a more
complete description of how economic impact was assessed and the changes
made to improve the assessment for this round.

o 	Criterion 7-community infrastructure: Selection criterion 7 examines
"the ability of the infrastructure of both the existing and potential
receiving communities to support forces, missions, and personnel." The
services and joint cross-service groups considered information on
demographics, childcare, cost of living, employment, education, housing,
medical care, safety and crime, transportation, and public utilities of
the communities impacted by a BRAC action.

o 	Criterion 8-environmental impact: Selection criterion 8 assesses "the
environmental impact, including the impact of costs related to potential
environmental restoration, waste management, and environmental compliance
activities" of closure and realignment recommendations. In

18 Payback period is defined as the number of years, beginning with the
date of completion of a closure or realignment, required for cumulative
estimated savings to exceed cumulative estimated costs incurred in net
present value terms as a result of implementing a BRAC action.

considering this criterion, the services and joint cross-service groups
focused mainly on potential environmental impacts while acknowledging,
when appropriate, known environmental restoration costs associated with an
installation recommended for closure or realignment. Waste management and
environmental compliance costs were factored into criterion 5. However,
under OSD policy guidance, environmental restoration costs were not
considered in the cost and savings analyses for evaluating individual
scenarios under criterion 5. DOD is obligated to restore contaminated
sites on military bases regardless of whether they are closed, and such
costs could be affected by reuse plans that cannot be known at this time
but would be budgeted for at a later time when those plans and costs are
better identified.

Each of the military departments produced reports with closure and
realignment recommendations, as did each of the joint cross-service
groups, the results of which are summarized in appendixes III through XII.
Figures 4 and 5 show, respectively, the 33 major closures and 30 major
realignments that have been recommended by DOD where plant replacement
values exceed $100 million for major base closures and net losses of 400
or more military and civilian personnel for major base realignments.

Figure 4: Major Base Closures with Plant Replacement Values Exceeding $100
Million

                       Source: GAO map based on DOD data.

Figure 5: Major Base Realignments with a Net Loss of 400 or More Military
and Civilian Personnel

Source: GAO map based on DOD data.

While the 2005 BRAC round, like earlier BRAC rounds, was chartered to
focus on United States domestic bases,19 DOD separately had under way a
review of overseas basing requirements that had implications for the

19 Besides the 50 states, this also includes the District of Columbia; the
Commonwealth of Puerto Rico; Guam; the Virgin Islands; American Samoa; and
any other commonwealth, territory, or possession of the United States.
P.L. 101-510, section 2910(7).

domestic BRAC process. In a September 2004 report to Congress, the Under
Secretary of Defense for Policy provided an update on DOD's "global
defense posture review." It noted that once completed, the changes
stemming from the review would result in the most profound reordering of
United States military forces overseas as the current posture has been
largely unchanged since the Korean War. The report noted that over the
next 10 years, it is planned that up to 70,000 military personnel would
return to the United States, along with approximately 100,000 family
members and civilian employees. It further noted that a net reduction of
approximately 35 percent of overseas sites-bases, installations, and
facilities-is planned. DOD had indicated that the domestic BRAC process
would be used in making decisions on where to relocate forces returning to
the United States from overseas bases.

Separately, Congress in 2003 mandated the creation of a special commission
to evaluate, among other things, the current and proposed overseas basing
structure of the United States military forces.20 The Commission's
observations are included in its May 2005 report.21 Among other things,
the Commission cited the need for appropriate planning to ensure the
availability of community infrastructure to support returning troops and
to mitigate the impact on communities.

DOD's Recommendations Would Have Varying Degrees of Success in Achieving
Goals for the 2005 BRAC Round

The recommendations proposed by the Secretary of Defense would have
varying degrees of success in achieving DOD's BRAC 2005 goals of reducing
infrastructure and achieving savings, furthering transformation
objectives, and fostering joint activity among the military services.
While DOD proposed a record number of closure and realignment actions,
exceeding those in all prior BRAC rounds combined, many proposals focus on
the reserve component bases and relatively few on closing active bases.
Projected savings are almost equally as large, as all prior BRAC rounds
combined, but about 80 percent of the projected 20-year net present value
savings (savings minus up-front investment costs) are derived from only 10
percent of the recommendations. While we believe the recommendations

20 The Commission on Review of Overseas Military Facility Structure of the
United States, also known as the Overseas Basing Commission. See P.L.
108-132, section 128 (Nov. 22, 2003).

21 Commission on Review of Overseas Military Facility Structure of the
United States (Washington, D.C.: May 9, 2005).

overall would achieve savings, up-front investment costs of about $24
billion are required to implement all recommendations to achieve DOD's
overall expected savings of nearly $50 billion over 20 years. Much of
these saving are related to eliminations of jobs currently held by
military personnel but are not likely to result in end-strength
reductions, limiting savings available for other purposes. Some proposed
actions represent some progress in emphasizing transformation and
jointness, but progress in these efforts varied without clear agreement on
transformational options to be considered, and many recommendations tended
to foster jointness by consolidating functions within rather than across
military services.

BRAC 2005 Round Differs The BRAC 2005 round is different from previous
base closure rounds in

from Past Rounds	terms of number of actions, projected implementation
costs, and estimated annual recurring savings. While the number of major
closures and realignments is just a little greater than individual
previous rounds, the number of minor closure and realignments, as shown in
table 1, is significantly greater than those in all previous rounds
combined.

             Table 1: Comparison of BRAC 2005 with Previous Rounds

                              Dollars in billions

                    Major bases Round Closures Realignments

Minor closures and realignments Total actions Costs

Net annual recurring savings

                              16      4      23      43      $2.7        $0.9 
             1991             26      17     32      75       5.2         2.0 
             1993             28      12     123     163      7.6         2.6 
             1995             27      22     57      106      6.5         1.7 
     Total (for previous      97      55     235     387     $22.0       $7.2 
         BRAC rounds)                                                
       Total (for 2005        33      30     774     837     $24.4       $5.5 
         BRAC round)                                                 

Source: DOD.

The large increase in minor closures and realignments is attributable
partly to actions involving the Army National Guard, Army Reserve, Air
National Guard, and vacating leased space.

The costs to implement the proposed actions are $24.4 billion compared to
a $22 billion total from the four previous rounds through 2001, the end of
the 6-year implementation period for the 1995 BRAC round.22 The increase
in costs is due partly to significant military construction and moving
costs associated with Army recommendations to realign its force structure,
and to recommendations to move activities from leased space onto military
installations. For example, the Army projects that it will need about $2.3
billion in military construction funds to build facilities for the troops
returning from overseas. Likewise, DOD projects that it will need an
additional $1.3 billion to build facilities for recommendations that
include activities being moved from leased space. Time will be required
for these costs to be offset by savings from BRAC actions and this in turn
affects the point at which net annual recurring savings can begin to
accrue.

Finally, the projected net annual recurring savings are $5.5 billion
compared to net annual recurring savings of $2.6 billion and $1.7 billion
for the 1993 and 1995 rounds respectively. The increased savings are
partly attributable to significant reductions in the number of military
positions and business process reengineering efforts.

Infrastructure Would Likely Be Reduced with Some Limitations Noted

DOD projects that the proposed recommendations would reduce excess
infrastructure capacity, indicating that the plant replacement value of
domestic installations would be reduced by about $27 billion, or 5
percent. However, the projected reductions in plant replacement value did
not account for the $2.2 billion in domestic military construction
projects associated with relocating forces from overseas. On the other
hand, reductions in leased space are not considered in the plant
replacement value analysis, since leased space is not government owned.
DOD estimates that its recommendations will reduce about 12 million square
feet of leased space.

22 We most recently reported that these costs were $23.3 billion through
fiscal year 2003 and they excluded an estimated $3.6 billion in costs that
are needed to complete environmental cleanup at BRAC bases in future
years. Also, they did not include about $1.9 billion in costs incurred by
other DOD and federal agencies to provide assistance to communities and
individuals impacted by BRAC as a result of prior BRAC rounds.

DOD Projects Recommendations Would Produce Savings, but there are
Limitations Associated with the Savings Estimates

DOD projects that its proposed recommendations will produce nearly $50
billion in 20-year net present value savings, with net annual recurring
savings of about $5.5 billion. There are limitations associated with the
savings claimed from military personnel reductions and we believe there is
uncertainty regarding the magnitude of savings likely to be realized in
other areas given unvalidated assumptions regarding expected efficiency
gains from business process reengineering efforts and projected savings
from sustainment, recapitalization, and base operating support.23

Table 2 summarizes the projected one-time cost, the cost or savings
anticipated during the 6-year implementation period for the closure or
realignment, the estimated net annual recurring savings, and the projected
20-year net present value costs or savings of DOD's recommendations. 24

Table 2: Projected Costs and Savings from BRAC 2005 Recommendations

                 Fiscal year 2005 constant dollars in millions

                                 DOD component

One-time (cost)

                                         Net implementation (cost) or savings

                                      Net annual recurring (cost) or savingsa

20-year net

present value (cost) or savingsb

                         Army  ($9,963.4)   ($8,519.1)   $497.6    ($3,038.6) 
                         Navy   (2,099.8)         440.7   753.5       7,713.7 
                    Air Force   (1,883.1)       2,635.5  1,248.5     14,560.3 
          Joint cross-service                                     
                       groups  (10,466.1)       1,372.8  2,985.1     29,569.1 
                        Total  ($24,412.4)  ($4,070.1)  $5,484.7    $48,804.5 

                       Source: GAO analysis of DOD data.

23 Sustainment refers to recurring maintenance and repair activities
necessary to keep facilities in good working order. Recapitalization
refers to major renovation or reconstruction activities (including
facility replacement) needed to keep facilities modern and efficient in an
environment of changing standards and missions. Base operating support
refers to a collection of day-to-day programs, activities, and services,
such as food services, grounds maintenance, and custodial services, needed
to keep the bases and installations in running order.

24 These projections exclude environmental restoration costs, which
historically have not been included in BRAC costs and savings analyses
because restoration is a liability that exists regardless of whether a
base is closed, but are included in implementation budgets once BRAC
recommendations have become binding.

aProjected annual recurring savings after the 6-year implementation
period. bDOD used a 2.8 percent discount rate to calculate net present
value.

Table 2 also shows the Navy, Air Force, and joint cross-service groups all
projecting net savings within the 6-year implementation period, as well as
significant 20-year net savings. In contrast, because of the nature of the
Army's proposed actions and costs, such as providing infrastructure for
troops returning from overseas and the consolidation and recapitalization
of reserve facilities, the Army does not achieve net savings either during
the implementation period or within 20 years, based on recommendations
included in its BRAC report.

Notwithstanding these projected savings, we identified limitations or
uncertainties about the magnitude of savings likely to be realized. As
figure 6 shows, 47 percent of the net annual recurring savings can be
attributed to projected military personnel reductions. About 40 percent
($2.1 billion) of the projected net annual recurring savings can be
attributed to savings from operation and maintenance activities, which
include terminating or reducing property sustainment and recapitalization,
base operating support, and civilian payroll. Furthermore, about $500
million of the "other" savings is based on business process reengineering
efforts, but some of the assumptions supporting the expected efficiency
gains have not been validated.

Figure 6: Estimated Net Annual Recurring Savings Dollars in millions

Civilian personnel $1,271

Military personnel $2,530

Base operations support $400

Sustainment and recapitalization $457

All other savings $699

Source: GAO.

Note: Analysis does not include data from one classified recommendation.

Military Personnel Savings	Much of the projected net annual recurring
savings (47 percent) are associated with eliminating positions currently
held by military personnel; but rather than reducing end-strength levels,
DOD indicates the positions are expected to be reassigned to other areas,
limiting dollar savings available for other uses. For example, although
the Air Force projects net annual recurring savings of about $732 million
from eliminating about 10,200 military positions, Air Force officials
stated the active duty positions will be reinvested to relieve stress on
high demand career fields and the reserve positions to new missions yet to
be identified. Likewise, the Army is projecting savings from eliminating
about 5,800 military positions, but it has no plans to reduce its
end-strength. Finally, the Navy is projecting it will eliminate about
4,000 active duty military positions, which a Navy official noted will
help it achieve the end-strength reductions already planned. As

we noted during our review of DOD's process during the 1995 BRAC round,
since these personnel will be assigned elsewhere rather than taken out of
the force structure, they do not represent dollar savings that can be
readily reallocated outside the personnel accounts.25 Without recognition
that these are not dollar savings that can be readily applied elsewhere,
this could create a false sense of savings available for use in other
areas traditionally cited as a beneficiary of BRAC savings, such as making
more funds available for modernization and better maintenance of remaining
facilities.

Sustainment, Recapitalization, DOD is also projecting savings from the
sustainment and recapitalization of

and Base Operating Support facilities that are scheduled to be demolished,
as well as from facilities that

Savings	might remain in DOD's real property inventory when activities are
realigned from one base to another. For example, the Industrial Joint
Cross-Service Group is claiming about $20 million in annual recurring
savings from the recapitalization of facilities at installations
responsible for destroying chemical weapons at three locations recommended
for closure.26 However, the Army had already expected to demolish these
chemical destruction facilities upon completing the destruction of the
chemical weapons at each site and the Army has not identified future
missions for these installations. As a result, we do not believe it is
appropriate for the Industrial Joint Cross-Service Group to claim any
recapitalization savings related to these installations.

Likewise, DOD is projecting savings from the recapitalization and
sustainment of facilities in cases where functions or activities would be
realigned from one base to another. However, it is not clear to what
extent the proposed realignments would result in an entire building or
portion of a building being vacated, or if entire buildings are vacated,
whether they would be declared excess and removed from the military
services' real property inventory. Our analysis shows that the supply and
storage group's recommendations project about $100 million in sustainment
and recapitalization savings from realigning defense distribution depots.
The group estimates its recommendations will vacate about 27 million
square feet of storage space. Supply and storage officials told us their
goal is to

25 GAO, Military Bases: Analysis of DOD's 1995 Process and Recommendations
for Closure and Realignment, GAO/NSIAD-95-133 (Washington, D.C.: Apr. 14,
1995).

26 The sites are the Newport Chemical Depot, Indiana; Umatilla Chemical
Depot, Oregon; and Deseret Chemical Depot, Utah.

vacate as much space as possible by re-warehousing inventory and by
reducing personnel spaces, but they do not have a specific plan for what
will happen to the space once it is vacated. In addition, until these
recommendations are ultimately approved and implemented, DOD will not be
in a good position to know exactly how much space is available or how this
space will be disposed of or utilized. As a result, it is unclear as to
how much of the estimated $100 million in annual recurring savings will
actually occur.

Collectively, the issues we identified suggest the potential for reduced
savings that are likely to be realized in the short term during the
implementation period, which could further reduce net annual recurring
savings realized in the long term. The short-term impact is that these
reduced savings could adversely affect DOD's plans for using these BRAC
savings to help offset the up-front investment costs required to implement
the recommendations and could further limit the amount of savings
available for transformation and modernization purposes.

Savings Based on Business DOD projected net annual recurring savings in
the "other" category as

Process Reengineering	shown in figure 6 include about $500 million that is
based on business process reengineering efforts. Our analysis indicates
that four recommendations-one from the Industrial Joint Cross-Service
Group and three from the Supply and Storage Joint Cross-Service
Group-involve primarily business process reengineering efforts. However,
the expected efficiency gains from these recommendations are based on
assumptions that are subject to some uncertainty and have not been
validated. For example, our analysis indicates that $215 million, or 63
percent, of the estimated annual recurring savings from the Industrial
Joint Cross-Service Group recommendation to create fleet readiness centers
within the Navy is based on business reengineering efforts that would
result in overhead efficiencies. Although the data suggest there is the
potential for savings, we believe the magnitude of the savings is somewhat
uncertain because the estimates are based on assumptions that have
undergone only limited testing. Realizing the full extent of the savings
would depend on actual implementation of the recommended actions and
modifications to the Navy's supply system. The industrial group and the
Navy assumed that combining depot and intermediate maintenance levels
would reduce the time needed for an item to be repaired at the
intermediate level, which in turn would reduce the number of items needing
to be kept in inventory, as well as the number of items being sent to a
depot for repair. These assumptions, which were the major determinant of
the realignment savings, were reportedly based on historical data and
pilot projects and

have not been independently reviewed or verified by the Naval Audit
Service, the DOD Inspector General, or us.

Furthermore, our analysis indicates that $291 million, or about 72
percent, of the net annual recurring savings expected from the Supply and
Storage Joint Cross-Service Group's three recommendations are also based
on business process reengineering. In the COBRA model, the savings are
categorized as procurement savings and are based on the expanded use of
performance-based logistics27 and reductions to duplicate inventory.
Supply and storage group staff said that these savings accrue from reduced
contract prices because the Defense Logistics Agency (DLA) will have
increased buying power since it is responsible for purchasing many more
items that before were purchased by each of the services. In addition,
savings accrue from increased use of performance-based agreements,28 a key
component of performance-based logistics. The group estimates DLA can save
2.8 cents on each contract dollar placed on performance-based agreements.
In addition, savings result from reductions in the amount of stock that
must be held in inventory. Supply and storage staff said that these
savings are attributable to reductions in the cost of money, cost of stock
losses due to obsolescence, and cost of storage. Together the group
estimates these factors save about 17 percent of the estimated value of
the acquisition cost of the stock that is no longer required to be held in
inventory. These savings estimates, for the most part, are based on
historical documentation provided by DLA, which time did not allow us to
validate. The extent to which these same savings will be achieved in the
future is uncertain. As noted above, how these actions are implemented
could also affect savings. We are concerned that this is another area that
could lead to a false sense of savings and lead to premature reductions in
affected budgets in advance of actual savings being fully realized, as has
sometimes occurred in past efforts to achieve savings through business
process reengineering efforts. We are also concerned that it could
exacerbate a problem we have previously identified regarding past BRAC
rounds involving the lack of adequate systems in place to track and update
savings resulting from BRAC actions-the focus of our recommendation

27 Performance-based logistics is defined as the purchase of weapon system
sustainment as part of an integrated weapon system package based on output
measures, such as weapon system availability, rather than input measures,
such as parts and technical services.

28 Performance-based agreements are defined as the negotiated agreements
between the major stakeholders that formally document the performance and
support expectations and resources to achieve the desired outcome.

for the Secretary of Defense. These concerns are reinforced by limitations
in DOD's financial management systems that historically have made it
difficult to fully identify the costs of operations and provide a complete
baseline from which to assess savings.

Transformation Cited as Justification for Many Recommendations Despite
Lack of Clear Agreement on Transformational Options

While furthering transformation was one of the BRAC goals, there was no
agreement between DOD and its components on what should be considered a
transformational effort. As part of the BRAC process, the department
developed over 200 transformational options for stationing and supporting
forces as well as for increasing operational efficiency and effectiveness.
The OSD BRAC office narrowed this list to 77 options, but agreement was
not reached within the department on these options, so none of them were
formally approved. Nonetheless, each service and joint cross-service group
was permitted to use the transformational options as appropriate to
support its candidate recommendations. Appendix XV has a list of these 77
draft options.

Collectively, these draft options did not provide a clear definition of
transformation across the department. The options ranged from those that
seemed to be service specific to those that suggested new ways of doing
business. For example, some transformational options included reducing the
number of Army Reserve regional headquarters; optimizing Air Force
squadrons; and co-locating various functions such as recruiting, military
and civilian personnel training, and research, development and acquisition
and test and evaluation, across the military departments. In contrast,
some options suggested consideration of new ways of doing business, such
as privatizing some functions and establishing a DOD agency to oversee
depot-level reparables.

While the transformational options were never formally approved, our
analysis indicates that many of DOD's recommendations reference one or
more of the 77 transformational options. For example, 15 of the
headquarters and support activities group recommendations reference the
option to minimize leased space and move organizations in leased space to
DOD-owned space. Likewise, 37 of the Army reserve component
recommendations reference the option to co-locate guard and reserve units
at active bases or consolidate guard and reserve units that are located in
proximity to one another at one location.

Conversely, a number of the scenarios that were initially considered but
not adopted reference transformational options that could have changed

existing business practices. For example, the education and training group
developed a number of scenarios-privatizing graduate education programs
and consolidating undergraduate fixed and rotary wing pilot training-based
on the draft transformational options, but none were ultimately approved
by the department.

                  Some Progress Made in Fostering Joint Basing

DOD's recommendations make some progress toward the goal of fostering
joint activity among the military services, based on a broad definition of
joint activity. We found that for DOD's recommendations, joint activity
included consolidating some training functions within the same service,
colocating like organizations and functions on the same installation, and
moving some organizations or functions closer to installations in order to
further opportunities for joint training. Although the recommendations
achieve some progress in fostering jointness, we found other instances
where DOD ultimately adopted a service-centric solution even though the
joint cross-service groups proposed a joint scenario. Table 3 shows the
major recommendations that foster joint activity.

Table 3: Major Recommendations Supporting Joint Activity

Type of joint activity Recommended action

Consolidation The education and training group is proposing to consolidate

o  initial Joint Strike Fighter aircraft training for the Navy, Marine
Corps, and Air Force at Eglin Air Force Base;

o  undergraduate navigator training for the Navy and Air Force at Naval
Air Station Pensacola; and

o  transportation management, religious studies, and culinary training
among the military services.

The medical group is proposing to establish

o  the Walter Reed National Military Medical Center, Bethesda, Maryland,
by consolidating the Walter Reed Army Medical Center and the National
Naval Medical Center, and

o  the San Antonio Regional Military Medical Center by relocating
inpatient care from Wilford Hall Medical Center to the Brooke Army Medical
Center.

The headquarters and support activities group is proposing to consolidate
the installation management functions across various bases.

Co-location	The Army is proposing to move the Third Army Headquarters
(Army component command to Central Command) to Shaw Air Force Base to be
co-located with the Air Force component of Central Command.

The Navy is proposing to move aircraft from Willow Grove Air Reserve
Station to McGuire Air Force Base, and from Naval Air Station Atlanta to
Robins Air Force Base.

The technical group is proposing to co-locate

o  the services' and defense agencies' extramural funding program managers
at the National Naval Medical Center, Bethesda, Maryland and

o  gun and ammunition research and development and acquisition to
Picatinny Arsenal.

The headquarters and support activities group is proposing to co-locate
DOD investigative agencies at Quantico Marine Corps Base.

Proximity	The Air Force is proposing to move A-10 aircraft to Moody Air
Force Base to enhance training Army units at Fort Benning and Fort
Stewart.

The Army is proposing to move a special operations unit from Fort Bragg to
Eglin Air Force Base in proximity to the Air Force's Special Operations
Command headquarters at Hurlburt Field.

Source: GAO analysis of DOD data.

While the proposal to create joint bases by consolidating common
installation management functions is projected to create greater
efficiencies, our prior work suggests that implementation of these actions
may prove challenging. The joint-basing recommendation involves one
service being responsible for various installation management support

functions29 at bases that share a common boundary or are in proximity to
one another. For example, the Army would be the executive agent for Fort
Lewis, Washington, and McChord Air Force Base, Washington, combined as
Joint Base Lewis-McChord. However, as evident from our recent visit to
both installations and discussions with base officials, concerns over
obstacles such as seeking efficiencies at the expense of the mission,
could jeopardize a smooth and successful implementation of the
recommendation.

In some cases, the joint cross-service groups proposed scenarios that
would have merged various support functions among the services, but a
service solution was adopted by DOD. For example, the Headquarters and
Support Activities Joint Cross-Service Group proposed to (1) consolidate
civilian personnel offices under a new defense agency as DOD implements
the national security personnel system, and (2) co-locate all military
personnel centers in San Antonio, Texas, in anticipation of a standard
military personnel system being implemented across the department.
However, in both cases, DOD decided to consolidate military and civilian
personnel centers within each service. Likewise, the Education and
Training Joint Cross-Service Group proposed scenarios to consolidate
undergraduate fixed wing training activities between the Air Force and the
Navy and rotary wing training activities between the Navy and the Army to
eliminate excess capacity. However, the proposals were not adopted because
the Navy and the Air Force expressed concerns that this recommendation
would result in significant permanent change of station costs for the
services, specifically the cost of students traveling to designated
training locations.

29 These functions could include such areas as real property management
and maintenance, utilities, housing, emergency services, environmental
services, base security, reserve component support, resource management,
procurement, personal property management, transportation, equipment
maintenance, retail supply, base communications, audio/visual services,
personnel and professional support, personnel services, food services,
laundry services, education services, personal and family services,
recreation, military exchange operations, airfield operations, garrison
operations, internal review, inspector general, and strategic planning.

DOD Developed a Generally Logical and Reasoned Process for Making BRAC
Decisions

Based on our analytical work, we believe DOD established and generally
followed a logical and reasoned process for formulating its list of BRAC
recommendations. The process was organized in a largely sequential manner
with a strong emphasis on ensuring that accurate data were obtained and
used. OSD established an oversight structure that allowed the seven
individual joint cross-service groups to play a larger, more visible role
in the 2005 BRAC process compared to BRAC 1995. Despite some overlap in
data collection and other phases of the process, these groups and the
military services generally followed the sequential BRAC process designed
to evaluate and subsequently identify recommendations within their
respective areas, with only the Army using a separate but parallel process
to evaluate its reserve components. DOD also incorporated into its
analytical process several key considerations required by the BRAC
legislation, including the use of certified data, basing its analysis on
its 20year force structure plan and emphasizing its military value
selection criteria, which included homeland defense and surge
capabilities. In addition, DOD's Inspector General and the military
service audit agencies helped to ensure the data used during the BRAC
process were accurate and reliable.

BRAC Process Was Logical and Largely Sequentially Structured

DOD provided overall policy guidance for the BRAC process, including a
requirement that its components develop and implement internal control
plans to ensure the accuracy and consistency of their data collection and
analyses. These plans also helped to ensure the overall integrity of the
process and the information upon which OSD considered each group's
recommendations. The BRAC recommendations, for the most part, resulted
from a data-intensive process that was supplemented by the use of military
judgment as needed. The process began with a set of sequential steps by
assessing capacity and military value, developing and analyzing scenarios,
then identifying candidate recommendations, which led to OSD's final list
of BRAC recommendations. Figure 7 illustrates the overall sequential
analytical process DOD generally employed to reach BRAC recommendations.

Figure 7: Analytical Process Leading to BRAC Recommendations

Source: GAO.

aA scenario is a proposal that has been declared for formal analysis by a
military department or joint cross-service group deliberative body and is
officially accounted for and tracked by OSD.

It must be noted, however, that while the process largely followed the
sequential process established by the department, initial difficulties
associated with obtaining complete and accurate data in a timely manner
added to overlap and varying degrees of concurrency between data
collection efforts and other steps in the process.

During the 2005 BRAC process, the seven individual joint cross-service
groups played a larger, more visible role compared to their role during
the 1995 BRAC round. Our analysis indicates that many, although not all,
actions proposed by these groups were accepted by OSD and the military
services. Based on lessons learned, OSD empowered these groups in 2005

to suggest BRAC recommendations directly to a senior-level group that
oversaw the BRAC 2005 analysis. Moreover, we noted a closer coordination
between these groups, the military services, and OSD than existed during
the 1995 round. OSD's efforts to integrate the process among these seven
joint cross-service groups with the military services' own efforts led to
increased discussions, greater visibility, and more influence for the
crossservice recommendations than in prior BRAC rounds.

To assist in the process for analyzing and developing recommendations, the
military services and joint cross-service groups used various analytical
tools. These tools helped to ensure a more consistent approach to BRAC
analysis and decision making. For example, all of the groups used the
DODapproved COBRA model to calculate costs, savings, and return on
investment for BRAC scenarios and, ultimately for the final 222 BRAC
recommendations. As noted in appendix XIII, the COBRA model was designed
to provide consistency across the military services and the joint
cross-service groups in estimating BRAC costs and savings. DOD has used
the COBRA model in each of the previous BRAC rounds and, over time, has
improved upon its design to provide better estimating capability. In our
past and current reviews of the COBRA model, we found it to be a generally
reasonable estimator for comparing potential costs and savings among
various BRAC options.

Furthermore, the military services and joint cross-service groups
generally used a consistent process to assess and formulate BRAC
recommendations, with one minor exception involving the Army reserve
components. The Army created a separate yet parallel approach in reviewing
its reserve components for several reasons, although it generally followed
the BRAC process. With respect to its reserve components, the Army did not
perform a military value rank-ordering of these various installations
across the country, but instead assessed the relative military value that
could be obtained by consolidating various facilities into a joint
facility in specific geographical locales to support, among other things,
reserve component training, recruiting, and retention efforts. This
approach provided an opportunity for the Army reserve components to
actively participate in the BRAC process along with the voluntary
participation of the states. The Army reported that consulting with the
states was crucial to ensure the support of the state governors and staff
Adjutants General for issues related to recommendations that affected the
National Guard. The Army's recommendations affected almost 10 percent of
the Army's 4,000 reserve components' facilities. More specifically, the
Army recommended 176 Army Reserve closures with the understanding

that the state governors will close 211 Army National Guard facilities
with the intent of relocating their units into 125 new Armed Forces
Reserve Centers. The Army reports that 38 states and Puerto Rico
voluntarily participated in the BRAC process.

The Air Force and the Navy also reviewed their reserve components'
installations but did so within the common analytical structure
established by OSD, yet with some differences in approach in involving
affected stakeholders in the process. For example, the Air Force did not
involve state officials or its State Adjutants General as it analyzed and
developed its BRAC recommendations. However, senior Air National Guard and
Reserve leadership were in attendance as voting members of the Air Force's
Base Closure Executive Group, a senior deliberative body for the BRAC
process. The Navy also reviewed its reserve components, including the
Marine Corps Reserves, within the BRAC process, and worked closely with
representatives from the Navy and Marine Corps reserve components to
consolidate units within active duty installations or armed forces reserve
centers without affecting recruiting demographics.

BRAC Process Incorporated DOD also incorporated into its analytical
process the legal considerations Key Legislative for formulating its
realignment and closure recommendations. As required Requirements by BRAC
legislation, DOD based its recommendations on (1) the use of

certified data, (2) its 20-year force structure plan, and (3) military
value criteria as the primary consideration in assessing and formulating
its recommendations.

Use of Certified Data	DOD collected capacity and military value data that
were certified as to their accuracy by hundreds of persons in senior
leadership positions across the country.30 These certified data were
obtained from corporate databases and from hundreds of defense
installations. DOD continued to collect certified data, as needed, to
support follow-up questions, cost calculations, and to develop
recommendations. In total, DOD projects that it collected over 25 million
pieces of data as part of the BRAC process.31 Given the extensive volume
of requested data from the 10 separate groups (3 military

30 Each official who submitted data for BRAC analysis certified that the
information was accurate and complete to the best of his or her knowledge
and belief.

31 Noted by the Secretary of Defense in his testimony before the BRAC
Commission on May 16, 2005.

Consideration of DOD's 20-year Force Structure Plan

Primary Consideration of Military Value Criteria, Which Included Homeland
Defense and Surge

departments and 7 joint cross-service groups), we noted that the data
collection process was quite lengthy and required significant efforts to
help ensure data accuracy, particularly from joint cross-service groups
that were attempting to obtain common data across multiple military
components, which, because of the diverse nature of the functions and
activities, do not always use the same data metrics. In some cases,
coordinating data requests, clarifying questions and answers, controlling
database entries, and other issues led to delays in the data-driven
analysis DOD originally envisioned. As such, some groups had to develop
strategy-based proposals. As time progressed, however, these groups
reported that they obtained the needed data, for the most part, to inform
and support their scenarios. The DOD Inspector General and the service's
audit agencies played an important role in ensuring that the data used in
the BRAC analyses were accurate and certified by cognizant senior
officials.

As congressionally mandated, each of the military services and the seven
joint cross-service groups considered DOD's 20-year force structure plan
in its analyses. DOD based its force structure plan for BRAC purposes on
an assessment of probable threats to national security during a 20-year
period beginning with fiscal year 2005. DOD provided this plan to Congress
in March 2004, and as authorized by the statute, it subsequently updated
it 1 year later in March 2005. Based on our analysis, updates to the force
structure affected some ongoing BRAC analyses. For example, the Industrial
Joint Cross-Service Group reassessed its data pertaining to overhauling
and repairing ships based on the updated force structure outlook and
decided that one of its two smaller shipyards-Naval Shipyard Pearl Harbor
or Naval Shipyard Portsmouth-could close. Ultimately, the Navy decided to
close the Portsmouth shipyard in Maine. In addition, the Navy told us it
recalculated its capacity based on updates to the force structure plan and
determined that there was no significant change to its orginial analysis.
The other groups, such as those examining headquarters and support
activities, education and training, or technical functions, considered
updates to the defense 20-year force structure and determined the changes
would have no impact on their ongoing analyses or the development of
recommendations.

DOD gave primary consideration to its military value selection criteria in
its process. Specifically, military value refers to the first four
selection criteria in figure 2 and includes an installation's current and
future mission capabilities, condition, ability to accommodate future
needs, and cost of operations. The manner in which each military service
or joint crossservice group approached its analysis of military value
varied according to

the unique aspects of the individual service or cross-service function.
These groups typically assessed military value by identifying multiple
attributes or characteristics related to each military value criterion,
then identifying qualitative metrics and measures and associated questions
to collect data to support the overall military value analysis. For
example, figure 8 illustrates how the Technical Joint Cross-Service Group
linked several of its military value attributes, metrics, and data
questions to the mandated military value criteria.

Figure 8: Selected Attributes, Metrics, and Data Questions Used to Assess
Military Value for a Technical Facility

Source: GAO analysis of Technical Joint Cross-Service Group data.

aThe BRAC military value criteria are the first four BRAC selection
criteria.

bMilitary value attributes are characteristics of each criterion. The
technical group used a total of five military value attributes.

cMilitary value metrics are measures for the attribute. The technical
group used a total of 30 military value metrics.

dThe technical group used a total of 44 data call questions.

Quantitative scoring plans were developed by each military service or
joint cross-service group assigning relative weights to each of the
military value criteria for use in evaluating and ranking facilities or
functions in their respective areas. Appendixes III through XII highlight
the use and linkages of military value criteria by each service and joint
cross-service group.

As noted earlier, based on congressional direction, there was enhanced
emphasis on two aspects of military value-an installation's ability to
serve

as a staging area for homeland defense missions and its ability to meet
unanticipated surge.32

o 	Homeland defense: Each of the three military services considered
homeland defense roles in its BRAC analysis and coordinated with the U.S.
Northern Command-a unified command responsible for homeland defense and
civil support. In October 2004, the U.S. Northern Command contacted the
Chairman of the Joint Chiefs of Staff, requesting to play a role in
ensuring that homeland defense received appropriate attention in the
analytical process. Our analysis shows that all three military departments
factored in homeland defense needs, with the Air Force recommendations
having the most impact. According to Air Force officials, the U.S.
Northern Command identified specific homeland defense missions assigned to
the Air Force, which they incorporated into its decision-making process.
Navy officials likewise discussed the impact of potential BRAC scenarios
on its maritime homeland defense mission with U.S. Northern Command, U.S.
Strategic Command, and the U.S. Coast Guard. In this regard, the Navy
decided to retain Naval Air Station Point Mugu, California, was
influenced, in part, because the U.S. Coast Guard wanted to consolidate
its West Coast aviation assets at this installation for homeland defense
purposes. According to Army officials, most of the their role in
supporting homeland defense is carried out by the Army National Guard. The
U.S. Northern Command reviewed the recommendations and found no
unacceptable risk to the homeland defense mission and support to civil
authorities.

o 	Surge: DOD left it to each military service and joint cross-service
group to determine how surge would be considered in the their analysis.
Generally, all the groups considered surge by retaining a certain
percentage of infrastructure, making more frequent use of existing
infrastructure, or retaining difficult-to-reconstitute assets. For
example, the Technical Joint Cross-Service Group set aside 10 percent of
its facility infrastructure for surge, while the Industrial Joint
Cross-Service Group factored in additional work shifts in its analysis.
The military services retained difficult-to-reconstitute assets as the
primary driver to satisfying the statutory requirement to consider surge
capability. Both the Army and Navy gave strong consideration to
infrastructure that would be difficult to reconstitute, such as large
tracts of land for

32 Homeland defense and surge considerations are in the military value
selection criteria 2 and 3, respectively, as reflected in P.L. 101-510,
section 2913(b)(2)&(3).

maneuver training purposes or berthing space for docking ships. For
example, the Navy has a finite number of ships and aircraft and would
likely have to increase operating tempo to meet surge needs. The Air Force
addressed surge by retaining sufficient capacity to absorb temporary
increases in operations, such as responding to emergencies or natural
catastrophic events like hurricane damage, and the capacity to permanently
relocate all of its aircraft stationed overseas in the United States if
needed.

Congress also mandated four other criteria to be considered in the
analytical process: cost and savings of the BRAC recommendations, economic
impact on affected communities, impact on communities' infrastructure, and
environmental impact. The extent these other mandated considerations
influenced recommendations varied. For example, high cost was the primary
reason the Army decided not to develop a recommendation to restation
troops returning from overseas to installations with large tracts of
undeveloped land that could potentially accommodate these moves, such as
Yuma Proving Ground, Arizona, or Dugway Proving Ground, Utah. Despite
these installations having the capacity to provide large training ranges,
they do not have existing infrastructure to immediately house 3,000 to
5,000 troops required for the Army's new modular combat brigades.33
Initially, the Army assessed the possibility of building new
infrastructure at these locations, but Army BRAC officials told us it
would be too costly given that the Army's COBRA analysis showed that at
Yuma, for example, it would cost about $2 billion to build the required
infrastructure. As a result, the Army decided to place units returning
from overseas at installations currently used to base other operational
units, notwithstanding limitations in existing training capacities.

Although there was heavy reliance on data for completing analyses,
military judgment was also a factor throughout the entire process,
starting with an analytical framework to base analysis of the 20-year
force structure plan and ending with the finalized list of 222
recommendations submitted to the BRAC Commission. Military judgment also
played a role in decisions on how military value selection criteria would
be captured as attributes,

33 Modularity refers to the Army Modular Force Initiative whereby the Army
is transforming its force structure by increasing from 67 brigade combat
teams to 77 modular brigade combat teams (43 active Army and 34 Army
National Guard) with the potential for 48 active Army modular brigade
combat teams.

with associated values or weights. Military judgment was also applied in
deciding which proposed scenarios or actions should move forward for
additional analysis. Generally, military judgment was exercised at this
stage to delete or modify a potential recommendation for reasons such as
strategic importance, as shown in the following examples:

o 	Naval Shipyard Pearl Harbor, Hawaii, which has a lower military value
than other shipyards, was eliminated from closure consideration because
the shipyard was considered to have more strategic significance in the
Pacific Ocean area compared to other alternatives.

o 	Tripler Army Medical Center, Hawaii, which has a lower military value
than some other bases, was eliminated from closure consideration because
it is the only defense medical center of significant size in the Pacific
Ocean area.

o 	Naval Station Everett, Washington, which has a lower military value
than some other bases, was eliminated from closure consideration because
of strategic reasons regarding the number and the locations of the Navy's
aircraft carriers on the West Coast and in the Pacific.

o 	Grand Forks Air Force Base, North Dakota, which has a lower military
value than some other bases, was eliminated from closure consideration
because of the belief that a strategic presence was needed in the north
central United States. Even though Grand Forks Air Force Base was retained
for strategic reasons, Minot Air Force Base is also located in North
Dakota and is not affected by any BRAC recommendations.

DOD Audit Agencies Helped to Improve the Accuracy of Data Used during the
BRAC Process

The oversight roles of the DOD Inspector General and the military
services' audit agency staff, given their access to relevant information
and officials as the process evolved, helped to improve the accuracy of
the data used in the BRAC process. The DOD Inspector General and most of
the individual service audit agencies' reports generally concluded that
the extensive amount of data used as the basis for BRAC decisions was
sufficiently valid and accurate for the purposes intended. In addition,
with limited exceptions, these reports did not identify any material
issues that would impede a BRAC recommendation.

The DOD Inspector General and the services' audit agencies played an
important role in ensuring that the data used in the BRAC analyses were
accurate and certified by cognizant senior officials. Their frontline
roles

and the thousands of staff days devoted to reviewing the massive data
collection efforts associated with the BRAC process added an important
aspect to the quality and integrity of the data used by military services
and joint cross-service groups. Through extensive audits of the capacity,
military value, and scenario data collected from field activities, these
audit agencies notified various BRAC teams of data discrepancies for
corrective action. The audit activities included validation of data,
compliance with data certification requirements employed throughout the
chain of command, and examination of the accuracy of the analytical data.
While the auditors initially encountered problems with regard to data
accuracy and the lack of supporting documentation for certain questions
and data elements, most of these concerns were resolved. In addition, the
auditors worked to ensure certified information was used for BRAC
analysis. These audit agencies also reviewed other facets of the process,
including the various internal control plans, the COBRA model, and other
modeling and analytical tools that were used in the development of
recommendations. Appendix XVI lists these organizations' audit reports
related to BRAC 2005 to the extent they were available at the time this
report was completed. Overall, these organizational audit agencies
reported the following:

o 	The Naval Audit Service reported that it visited 214 sites, covering 45
data calls, and audited over 8,300 questions. It concluded that the data
appeared reasonably accurate and complete and the Navy complied with
statutory guidance and DOD policies and procedures.

o 	The Air Force Audit Agency officials told us they visited 104
installations, reviewed over 11,110 data call responses at 126 Air Force
locations, 8 major commands, the Air National Guard, and Headquarters Air
Force, and concluded that data used for Air Force BRAC analysis were
generally reliable.

o 	The Army Audit Agency reported that it visited 32 installations and 3
leased facilities and reviewed for accuracy over 2,342 responses. It
concluded that the data was reasonably accurate and that the Army BRAC
office had a sound process in place to collect certified data.

o 	DOD Inspector General officials told us they visited about 1,550 sites
covering 29 defense agencies and organizations and reviewed over 15,770
responses. We were told that these responses were generally supported,
complete, and reasonable. The DOD Inspector General also evaluated the
validity, integrity, and documentation of data used by the

seven joint cross-service groups and found they generally used certified
data for the BRAC analysis.

We closely coordinated with the DOD Inspector General and the three
service audit agencies to maximize our individual and collective efforts
and avoid duplication. As part of this coordination, we observed their
audit efforts at selected military installations to verify the scope and
quality of coverage they provided throughout the process and to give us
insights into potential issues having broader applicability across the
entire process. We also observed the work of these audit agencies to
better familiarize ourselves with the types of issues being identified and
resolved, with a view toward determining their materiality to the overall
process.

Several Aspects of DOD's BRAC Recommendations and Rejected Proposals May
Warrant Further Attention

We identified issues regarding DOD's recommendations, and other actions
considered during the selection process that may warrant further attention
by the BRAC Commission. Many of the issues relate to how costs and savings
were estimated while others relate to potential impacts on communities
surrounding bases that stand to gain or lose missions and personnel as a
result of BRAC actions. Further, we are highlighting candidate
recommendations that were presented during the selection process by either
the military services or the joint cross-service groups to senior DOD
leadership within the IEC that were projected as having the potential to
generate significant savings, and which were substantially revised or
deleted from further consideration during the last few weeks or days of
the selection process. Additional discussion of issues targeted more
specifically to the work and recommendations of the military services and
joint cross-service groups is included in appendixes III through XII.

Issues with DOD's BRAC Recommendations

We identified a number of issues, most of which apply to a broad range of
DOD's recommendations, that may warrant further attention by the BRAC
Commission. In addition to the issue previously discussed regarding
military personnel eliminations being claimed as savings to the
department, other issues include (1) instances of lengthy payback periods
(time required to recoup up-front investment costs), (2) inconsistencies
in how DOD estimated costs for BRAC actions involving military
construction projects, (3) uncertainties in estimating the total costs to
the government to implement DOD's recommended actions, and (4) potential
impacts on communities surrounding bases that are expected to gain large
numbers of personnel if DOD's recommendations are implemented.

Some Lengthy Payback Periods	Many of the 222 recommendations DOD made in
the 2005 round are associated with lengthy payback periods, which, in some
cases, call into question whether the department would be gaining
sufficient monetary value for the up-front investment cost required to
implement its recommendations and the time required to recover this
investment. Our analysis indicates that 143, or 64 percent, of DOD's
recommendations are associated with payback periods that are 6 years or
less while 79, or 36 percent, of the recommendations are associated with
lengthier paybacks that exceed the 6-year mark or never produce savings.
DOD officials acknowledge that the additional objectives of fostering
jointness and transformation have had some effect on generating
recommendations with longer payback periods. Furthermore, our analysis
shows that the number of recommendations with lengthy payback periods
varied across the military services and the joint cross-service groups, as
shown in table 4.

Table 4: Payback Periods for BRAC Recommendations by DOD Component

                          Payback period DOD component

Number of recommendations

Immediate to 6 years

                                  7 to 9 years

10 years and greater Never

                        Army         56     26         3        22    
                        Navy        53a     45         2        6     
                   Air Force         42     29         6        7     
               Education and                                          
                    training          9     5          0        3     
                Headquarters                                          
                 and support                                          
                  activities         21     14         2        5     
                  Industrial         17     13         3        1     
                Intelligence          2     0          2        0     
                     Medical          6     3          1        2     
                  Supply and                                          
                     storage          3     3          0        0           0 
                   Technical         13     5          5        3           0 
                       Total        222    143        24        49          6 
                  Percentage        100     64        11        22          3 

Source: GAO Analysis of DOD data.

aWhile the DOD BRAC report lists 21 Navy recommendations, several of these
have multiple actions, thus bringing the total to 53 recommendations.

As shown in table 4, the Army has five recommendations and the education
and training group has one recommendation that never payback, as described
below:

o 	Army realignment of a special forces unit from Fort Bragg, North
Carolina, to Eglin Air Force Base, Florida;

o 	Army realignment of a heavy brigade from Fort Hood, Texas, to Fort
Carson, Colorado;

o 	Army realignment of a heavy brigade to Fort Bliss, Texas, and infantry
and aviation units to Fort Riley, Kansas;

o  Army reserve component consolidations in Minnesota;

o  Army reserve component consolidations in North Dakota; and

o 	Education and Training Joint Cross-Service Group's establishment of
Joint Strike Fighter aircraft training at Eglin Air Force Base, Florida.

According to Army officials, their five recommendations have no payback
because, in part, they must build additional facilities to accommodate the
return of about 47,000 forces currently stationed overseas to the United
States as part of DOD's Integrated Global Presence and Basing Strategy
initiative (see app. III for further discussion of the restationing
initiative). According to the education and training group, its one
recommendation with no payback period is due to the high military
construction costs associated with the new mission to consolidate initial
training for the Joint Strike Fighter aircraft for the Navy, the Marine
Corps and the Air Force.

Similarly, the Army has nearly 50 percent of the total number of DOD
recommendations with payback periods of 10 years or longer. Our analysis
of Army data shows that these lengthy paybacks are attributable to many of
the recommendations regarding the reserve components. These
recommendations typically have a combination of relatively high military
construction costs and relatively low annual recurring savings, which tend
to lengthen the payback period.

We also identified some portions of DOD's individual recommendations that
are associated with lengthy payback periods for certain BRAC actions but
are imbedded within larger bundled recommendations. The following are a
few examples:

Inconsistencies in DOD's Estimated Costs for Military Construction
Projects

o 	A proposal initially developed by the Headquarters and Support
Activities Joint Cross-Service Group to move the Army Materiel Command
from Fort Belvoir, Virginia, to Redstone Arsenal, Alabama, had more than a
100-year payback period with a net cost over a 20-year period. However,
the proposal did not include some expected savings that, if included,
would have reduced the payback period to 32 years. Concurrently, the group
developed a separate proposal to relocate various Army offices from leased
and government-owned office space onto Fort Sam Houston, Texas, which
would have resulted in a 3-year payback period. The headquarters group
decided to combine these two stand-alone proposals into one
recommendation, resulting in an expected 20-year net present value savings
of about $123 million with a 10-year payback.

o 	Many of the individual Air Force proposals involving the Air National
Guard and Air Force Reserve had payback periods ranging from 10 to more
than 100 years. These individual proposals were subsequently revised by
combining them with other related proposals to produce recommendations
that had significant savings, minimized the longer payback periods, and
linked operational realignment actions. We found that this change occurred
in the realignment of Lambert-St. Louis International Airport Air Guard
Station, Missouri, which originally had a 63-year payback period and
resulted in a 20-year net present value cost of about $22 million.
However, this realignment is now a part of the closure of Otis Air
National Guard Base, Massachusetts, and the realignment of Atlantic City
Air Guard Station, New Jersey. The combined recommendation results in a
20-year net present value savings of $336 million and a 3-year payback
period.

While the military services used the COBRA model to estimate the costs for
military construction projects needed to implement BRAC recommendations,
we found some inconsistencies in how they estimated some costs associated
with these projects. While the impact of these inconsistencies on savings
is likely not as great as others noted in this report, it nevertheless
contributes to the overall imprecision of the cost estimates of DOD's
recommended actions.

One area of inconsistent accounting involves the relative amounts of
estimated support costs-such as the cost of connecting a new facility to
existing water, sewage, and electrical systems-associated with military
construction projects across the services. In its estimates, the Army
considered these additional support costs as one-time costs whereas the

Navy and the Air Force included them in the cost of the military
construction projects for each project. By including these support costs
in the cost of each project, the Navy and Air Force generally generated
higher relative recurring costs than the Army for the recapitalization of
facilities over time. Specifically, the Army increased its military
construction cost estimates by 18.5 percent to account for the connection
of the projected new facilities' utilities. The Air Force, on the other
hand, increased its construction costs for support services from 8 to 40
percent, depending on the type of facility, while the Navy included
support costs at only two locations. According to the Special Assistant to
the Secretary of the Navy for BRAC, the Navy assigned teams to review all
proposed military construction projects by location to determine any
support costs necessary for connection of utilities. Our analysis shows
that had the Army used the same methodology as the Navy and the Air Force,
the Army would incur about $66 million in additional recapitalization
costs for all of its proposed military construction projects.

The services were also inconsistent in considering the costs associated
with meeting DOD's antiterrorism force protection standards in their
estimated costs for military construction projects.34 The Air Force
increased the expected costs of its military construction projects by 2.3
percent, or about $18 million, to meet DOD's standards. Air Force
officials noted that these funds would provide enhancements such as
security barriers and blast proof windows. The Army and the Navy, on the
other hand, did not include additional costs to meet the department's
standards in their proposed military construction projects. If the Army
and the Navy estimated costs similarly to the Air Force, the cost of their
proposed military construction projects would have increased by about $146
million and $25 million, respectively.

Uncertainties in Accounting for DOD's cost and savings estimates for
implementing its recommendations

All Expected Costs or Savings to do not fully reflect all expected costs
or savings that may accrue to the

the Federal Government	federal government. The BRAC legislation requires
that DOD take into account the effect of proposed closure or realignment
on the costs of any other activity of the department or any other federal
agency that may be

34 DOD's antiterrorism standards, effective no later than October 2009,
apply to both new and existing DOD-inhabited buildings and require, for
example, minimum building standoff distances; structures that will avoid
progressive building collapse; reinforced exterior walls; glazed windows,
skylights, and doors; and properly secured entrances. Unified Facilities
Criteria, 4-010-01 (Oct. 8, 2003).

required to assume responsibility for activities at military
installations.35 While the services and joint cross-service groups were
aware of the potential for these costs, estimated costs were not included
in the cost and savings analysis because it was unclear what actions an
agency might take in response to the BRAC action. One such agency was the
U.S. Coast Guard, which currently maintains some of its ships or various
units at several installations that are slated to close. Navy BRAC
officials briefed the U.S. Coast Guard about its recommendations prior to
the list being published, but the Air Force did not meet with the Coast
Guard. The U.S. Coast Guard was still in the process of evaluating various
responses to take as a result of the proposed BRAC actions and did not
complete its analysis in time for it to be included in this report.

Further, as noted earlier, estimated costs for the environmental
restoration of bases undergoing closure or realignment are not included in
DOD's cost and savings analyses. Such costs would be difficult to fully
project at this point without planned reuse of the unneeded property being
known. Consistent with the prior BRAC rounds, DOD excluded estimates for
base environment restoration actions from its costs and savings analysis
and in determining payback periods, on the premise that restoration is a
liability that the department must address regardless of whether a base is
kept open or closed and therefore should not be included in the COBRA
analysis. Nevertheless, DOD did give consideration to such costs in
addressing selection criterion 8, and included available information on
estimated restoration costs as part of the data supporting its BRAC
recommendations. DOD estimates that the restoration costs to implement its
major closures would be about $949 million, as shown in table 5. (See fig.
4 in the Background section for a map of DOD's major base closures.)

35 P.L. 101-510, section 2913(e).

Table 5: Estimated Environmental Restoration Costs for DOD's Recommended
Major Base Closures

                              Dollars in millions

                                  Number of major     Estimated environmental 
             Military service            closures          restoration costsa 
                         Army                  14                      $723.3 
                         Navy                   9                       154.5 
                    Air Force                  10                        71.3 
                        Total                  33                      $949.1 

Source: GAO analysis of DOD data.

aEstimated costs include some costs not specifically reported in DOD's May
2005 report to the Defense Base Closure and Realignment Commission. While
the Army and Navy generally reported these costs, the Air Force did not
but its costs were noted in supporting documentation.

Based on the data provided, the Army would incur the largest share of
estimated restoration costs due to the closure of several ammunition
plants and chemical depots. The largest expected costs for any one
location across DOD, about $383 million, would be for restoration at
Hawthorne Army Depot, Nevada. While the DOD report does not specifically
identify the potential for some additional restoration costs at its
installations, available supporting documentation does identify some
additional costs. For example, the Army estimated the range restoration at
Hawthorne Army Depot could cost from about $27 million to $147 million,
which is not included in the estimates in table 5. Further, the Army
recognizes that additional restoration costs could be incurred at six
additional locations that have ranges and chemical munitions, but these
costs have not yet been determined.

Our prior work has shown that environmental costs can be significant, as
evidenced by the nearly $12 billion in total cost DOD expected to incur
when all restoration actions associated with the prior BRAC rounds are
completed. Service officials told us that the projected cost estimates for
environmental restoration are lower, in general, because the environmental
condition of today's bases is much better than the condition of bases
closed during the prior BRAC rounds, primarily because of DOD's ongoing
active base environmental restoration program. Nonetheless, our prior work
has indicated that as closures are implemented, more intensive
environmental investigations occur and additional hazardous conditions may
be uncovered that could result in additional, unanticipated restoration
and higher costs. Finally, the services' preliminary estimates are based
on restoration standards that are applicable for the current use of the
base

property. Because reuse plans developed by communities receiving former
base property sometimes reflect different uses for the property this could
lead to more stringent and thus more expensive restoration in many cases.

Based on experiences from prior BRAC rounds, we believe other costs are
also likely to be incurred, although not required to be included in DOD's
cost and savings analysis but which could add to the total costs to the
government of implementing the BRAC round. These costs include transition
assistance, planning grants, and other assistance made available to
affected communities by DOD and other agencies. DOD officials told us that
such estimates were not included in the prior rounds' analyses and that it
was too difficult to project these costs, given the unknown factors
associated with the number of communities affected and the costs that
would be required to assist them. Additionally, as we reported in January
2005,36 in the prior four BRAC rounds, DOD's Office of Economic
Adjustment, the Department of Labor, the Economic Development
Administration within the Department of Commerce, and the Federal Aviation
Administration provided nearly $2 billion in assistance through fiscal
year 2004 to communities and individuals, and according to DOD officials,
these agencies are slated to perform similar roles for the 2005 round.
However, while the magnitude of this assistance is unknown at this time,
it is important to note that assistance will likely be needed in this
round, as contrasted with prior rounds, for not only those communities
that surround bases losing missions and personnel but also for communities
that face considerable challenges dealing with large influxes of personnel
and military missions. For example, DOD stated in its 2005 BRAC report
that over 100 actions significantly affect local communities, triggering
federal assistance from DOD and other federal agencies. Also, as discussed
more fully later, the number of bases in the 2005 BRAC round that will
gain several thousand personnel from the recommended actions could
increase pressure for federal assistance to mitigate the impact on
community infrastructure, such as schools and roads, with the potential
for more costs than in the prior rounds.

Finally, the BRAC costs and savings estimates do not include any
anticipated revenue from such actions as the sale of unneeded former base
property or the transfer of property to communities through economic

36 GAO, Military Base Closures: Updated Status of Prior Base Realignments
and Closures, GAO-05-138 (Washington, D.C.: Jan. 13, 2005).

development conveyances.37 The potential for significant revenue may exist
at certain locations. For example, the Navy sold some unneeded property
from prior round actions in California at the former El Toro Marine Corps
Air Station for about $650 million and the former Tustin Marine Corps Air
Station for $208.5 million. The extent to which sales will play a role in
the disposal of unneeded property arising from the 2005 BRAC round remains
to be seen.

Impact of BRAC Recommended The recommended actions for the 2005 BRAC round
will have varying

Actions on Communities	degrees of impact on communities surrounding bases
undergoing a closure or realignment. While some will face economic
recovery challenges as a result of a closure and associated losses of base
personnel, others, which expect large influxes of personnel due to
increased base activity, face a different set of challenges involving
community infrastructure necessary to accommodate growth.

In examining the economic impact of the 222 BRAC recommendations as
measured by the percentage of employment, DOD data indicate that most
economic areas across the country are expected to be affected very little
but a few could face substantial impact. Almost 83 percent of the 244
economic areas affected by BRAC recommendations fall between a 1 percent
loss in employment and a 1 percent gain in employment.38 Slightly more
than 9 percent of the economic areas had a negative economic impact of
greater than 1 percent, but for some of these areas, the projected impact
is fairly significant, ranging up to a potential direct and indirect loss
of up to nearly 21 percent. Almost 8 percent of the economic areas had a
positive economic impact greater than 1 percent. Appendix XIV provides
additional detail on our economic analyses.

Of those communities facing potential negative economic impact, six
communities face the potential for a fairly significant impact. They
include communities surrounding Cannon Air Force Base, New Mexico;

37 Economic development conveyances are used to transfer unneeded property
to
communities for uses that promote economic recovery and job creation. The
National
Defense Authorization Act for Fiscal Year 2002 (P.L. 107-107, Title XXX,
section 3006
(Dec. 28, 2001)) included a provision stipulating that DOD seek to obtain
fair market value
for BRAC-related transfers of property in the 2005 round. The effect this
provision will have
on the generation of revenue for DOD is unknown at this time.

38 Some of the recommendations had multiple actions that affected more
than one economic
area.

Hawthorne Army Depot, Nevada; Naval Support Activity Crane, Indiana;
Submarine Base New London, Connecticut; Eielson Air Force Base, Alaska;
and Ellsworth Air Force Base, South Dakota, where the negative impact on
employment as a percent of area employment ranges from 8.5 percent to 20.5
percent. Our prior work has shown that a variety of factors will affect
how quickly communities are able to rebound from the negative economic
consequences of closures and realignments. They include such factors as
the trends associated with the national, regional, and local economies;
natural and labor resources; effective planning for reuse of base
property; and federal, state, and local government assistance to
facilitate transition planning and execution. In a series of reports that
have assessed the progress in implementing closures and realignments in
prior BRAC rounds, we reported that most communities surrounding closed
bases have been faring well in relation to key national economic
indicators-unemployment rate and the average annual real per capita income
growth rates.39 In our January 2005 report for example, we further
reported that while some communities surrounding closed bases were faring
better than others, most have recovered or are continuing to recover from
the impact of BRAC, with more mixed results recently, allowing for some
negative impact from the economic downturn nationwide in recent years.

The 2005 round, however, also has the potential to significantly affect a
number of communities surrounding installations, which are expected to
experience considerable growth in the numbers of military, civilian, and
civilian support personnel. These personnel increases are likely to place
additional demands on community services, such as providing adequate
housing and schools, for which the communities may not have adequate
resources to address in the short term. The total gains can be much more
than just those personnel with the consideration of accompanying families.
Table 6 shows that 20 installations are expected to realize gains of over
2,000 military, civilian, and mission support contractor personnel for an
aggregate increase of more than 106,000 personnel.

39 GAO, Military Base Closures: Updated Status of Prior Base Realignments
and Closures, GAO-05-138 (Washington, D.C.: Jan. 13, 2005); GAO, Military
Base Closures: Progress in Completing Actions from Prior Realignments and
Closures, GAO-02-433 (Washington, D.C.: Apr. 5, 2002); and GAO, Military
Bases: Status of Prior Base Realignment and Closure Rounds,
GAO/NSAID-99-36 (Washington, D.C.: Dec. 11, 1998).

Table 6: Military Installations That Would Receive a Net Gain of Over
2,000 Personnel due to BRAC Actions

                                Net gain of       Net gain of  Total net gain 
                                                    civilians              of 
                                   military       and mission personnel to an 
                                  personnel           support 
          Installation                to an contractors to an    installation 
                               installation installation      
        Fort Belvoir, VA              4,521            15,837          20,358 
         Fort Bliss, TX              11,354               147          11,501 
        Fort Benning, GA              9,221               618           9,839 
      Fort Sam Houston, TX            7,648             1,716           9,364 
          Fort Lee, VA                6,139             1,205           7,344 
         Fort Meade, MD                 682             4,679           5,361 
         Fort Carson, CO              4,178               199           4,377 
         Fort Bragg, NC               4,078               247           4,325 
Little Rock Air Force Base,        3,579               319           3,898 
               AR                                             
          Fort Sill, OK               3,444               158           3,602 
       Defense Finance and              114             3,381           3,495 
     Accounting Service, IN                                   
    Submarine Base Kings Bay,         3,245               122           3,367 
               GA                                             
Marine Corps Base Quantico,          446             2,567           3,013 
               VA                                             
         Fort Riley, KS               2,415               440           2,855 
    Naval Station Norfolk, VA         3,447             (640)           2,807 
    Naval Air Weapons Station           154             2,315           2,469 
         China Lake, CA                                       
    Eglin Air Force Base, FL          2,140                78           2,218 

         Aberdeen Proving Ground, MD         (3,411)        5,587       2,176 
         Naval Shipyard Norfolk, VA            177          1,859       2,036 
     Naval Air Station Jacksonville, FL       1,902           123       2,025 
                    Total                    65,473        40,957     106,430 

Source: GAO analysis of DOD data.

As shown in table 6, most of the gaining installations are Army
installations with the gains attributable to a number of actions,
including the return of large numbers of personnel from overseas locations
under DOD's integrated global presence and basing strategy and the
consolidation of various activities, such as combat-support related
activities at Fort Lee, Virgina. Fort Belvoir, Virginia, has the largest
expected growth, due in large measure to some consolidation of various
activities from lease space in the Washington, D.C. area.

The challenges facing communities surrounding gaining bases can be many,
including increased housing demand, increased demands for roads and
utilities, and adequate schools. These challenges can be formidable as

communities may be faced with inadequate resources to address concerns in
these areas as follows:

o 	Housing: If history is any indication, while some of the personnel
transferring into a base may live on-base, the majority may not, as the
military services are turning more to housing privatization. Installation
officials at Fort Riley, Kansas, told us about concerns about the nearby
availability of housing (within a 20-mile radius) to support the expected
influx of military and civilian personnel and their families transferring
to the base. For those installations where adequate housing is not
available in the surrounding communities existing housing privatization
projects would need to be revised and expedited to provide for additional
units. Fort Bliss, Texas, officials told us that they expect the need to
accelerate their existing housing privatization efforts, but would require
additional funds to do so. Currently, housing privatization has taken
place or is in the process of taking place at several of these
installations and similar efforts may be needed there as well.

o 	Schools: Effects on bases with the greatest gain in personnel resulting
from BRAC vary between whether dependents attend schools operated on base
by DOD (Fort Benning, Fort Bragg, and Marine Corps Base Quantico as shown
in table 6) or schools operated by local educational agencies. We recently
reported on challenges likely to be faced by both DOD operated schools and
those operated by local educational agencies in the post BRAC environment
at these and other locations.40 Recently, in visiting selected bases
affected by the BRAC recommendations, installation officials told us that
while local educational authorities should be able to absorb additional
students into their school systems, they are more concerned about the
potential shortage of teachers. Another concern is that make-shift
trailers or temporary modular facilities might be used. For example, while
Kings Bay, Georgia, officials told us that the local school system should
be able to accomodate the increase of students, it may need to resort to
the use of portable classrooms. All installations that are expected to
gain more than 2,000 personnel have local community-administrated school
systems with the exceptions of Fort Benning, Fort Bragg, and Marine Corps
Base Quantico which have DOD-administrated school systems. If additional

40 GAO, DOD Schools: Limitations in DOD-Sponsored Study on Transfer
Alternatives Underscore Need for Additional Assessment, GAO-05-469
(Washington, D.C.: Apr. 26, 2005).

capacity is required at these three locations, additional military
constructions funds would likely be needed.

o 	Other infrastructure: Installation officials we spoke to also expressed
some concern for the increased demand for various community services, such
as health care, transportation, and utilities to accommodate personnel
increases. Fort Carson, Colorado, officials told us that with its expected
personnel increases, the local community will need more TRICARE providers
to meet the expected demand. In other cases, such as at Fort Belvoir,
Virgina, discussion has ensued regarding the need for increased mass
transit capability, which may involve requests for millions of dollars in
federal grant assistance.

As previously noted, it is likely that these concerns may increase federal
governmental expenditures that are not included in the BRAC cost and
savings analyses.

Candidate Recommendations That Were Deleted or Revised during the Final
Weeks of the Selection Process

We also identified several candidate recommendations that were presented
by the military services or joint cross-service groups to the IEC-DOD's
senior BRAC leadership group-that were substantially revised or deleted
from further consideration during the last few weeks of the BRAC section
process. In aggregate, based on projected savings, these actions reduced
the overall potential for estimated net annual recurring savings by nearly
$500 million and estimated 20-year net present value savings by over $4.8
billion, as shown in table 7.

Table 7: Candidate Recommendations That Were Deleted or Significantly Revised by
                      the Infrastructure Executive Council

Dollars in millions

         Initial proposal IEC decision Change Candidate recommendations

                                                 Net annual recurring savings

20-year savings

                                                 Net annual recurring savings

20-year savings

                                                 Net annual recurring savings

20-year savings

                          Proposals deleted by the IEC

    Close Naval Postgraduate School, CA   $90 $1,120 $0   $0   ($90) ($1,120) 
      Close Uniformed Services of the                                
               University of                                         
          the Health Sciences, MD          58  575     0   0    (58)    (575) 
    Close Natick Soldier Systems Center,   20  114     0   0    (20)    (114) 
                     MA                                              
    Close Adelphi Laboratory Center, MD   166  949   144 1,026  (22) 
        Close Carlisle Barracks, PA        50  555     0   0    (50)    (555) 
        Close Air Force Institute of        8   14     0   0                  
               Technology, OH                                    (8)     (14)

Proposals changed from closure to realignment by the IEC

Close Marine Corps Logistics Base,                                
                Barstow,                                             
                   CA                  142 1,600    18  231    (124)  (1,369) 
        Close Naval Air Station,        93  841     35  239     (58)    (602) 
             Brunswick, ME                                           
Close Grand Forks Air Force Base,   226 2,656  173  1,982    (53)    (674) 
                   ND                                                
       Close Rome Laboratory, NY        46  230     41  357      (5) 
                 Total                $899 $8,654 $411 $3,835 ($488) ($4,819) 

Source: GAO analysis of DOD data.

Each of the cases highlighted in the table is described in additional
detail below.

o 	The educational and training group proposed to privatize graduate
education, which enabled the Navy to recommend the closure of the Naval
Postgraduate School, Monterey, California. The proposed closure supported
DOD's draft transformational option to privatize graduatelevel education.
Navy officials, however, stated that they believed professional military
education was more important than ever given the world climate. During the
IEC deliberations, Navy officials expressed concern about the loss of such
a unique graduate military education facility and the effect on
international students who participate in the school's programs. Further,
in the IEC meeting the Navy stated its belief that all education
recommendations should be withdrawn because education is a core competency
of the department and relying on the

private sector to fulfill that requirement is too risky. The IEC agreed
and disapproved the recommendation.

o 	The Medical Joint Cross-Service Group recommended that the Uniformed
Services University of the Health Sciences associated with the National
Naval Medical Center in Bethesda, Maryland, be closed, citing that
educating physicians at the site was more costly than alternative
scholarship programs (about triple the cost) and that the department could
rely on civilian universities to educate military physicians.41 We also
reported previously that the university is a more costly way to educate
military physicians.42 The IEC, subsequently disapproved the
recommendation, citing that education is a core competency for the
department, and therefore it was considered too risky to rely on the
private sector to provide this function. Also, a DOD official indicated
that, with the recommended action to realign Walter Reed Army Medical
Center to Bethesda, Maryland, it would be highly desirable to have a
military medical college associated with this medical facility in order
for it to be a world-class medical center.

o 	The Technical Joint Cross-Service Group, through the Army, proposed
that the Natick Soldier Systems Center, Massachusetts, be closed and
technical functions relocated to Aberdeen Proving Ground, Maryland, to
create an integrated command, control, communications, and computers,
intelligence, surveillance, and reconnaissance center. In its presentation
to the IEC, the Army noted that the cost for this recommendation was high,
but it would generate greater efficiencies and faster transition from
research and development through the acquisition and fielding phases of
the technology. Although the ISG initially raised no concerns and approved
the recommendation, the IEC disapproved it in the last week of the BRAC
selection process, citing the high cost of the recommendation.

41 The medical group developed this candidate recommendation with the
knowledge of a specific provision of federal law (10 U.S.C. 2112a) that
could preclude closure of the university.

42 See GAO, Budget Issues: Budgetary Implications of Selected GAO Work for
Fiscal Year 2001, GAO/OCG-00-8 (Washington, D.C.: Mar. 31, 2000); GAO,
Budget Issues: Budgetary Implications of Selected GAO Work for Fiscal Year
2000, GAO/OCG-99-26 (Washington, D.C.: Apr. 16, 1999); and GAO, Military
Physicians: DOD's Medical School and Scholarship Program, GAO/HEHS-95-244
(Washington, D.C.: Sept. 29, 1995).

o 	The closure of the Adelphi Laboratory Center, Maryland, was originally
part of the recommendation to close Fort Monmouth, New Jersey, and, along
with Natick Soldier Systems Center, was part of the Army's plan for an
integrated command, control, communications, and computers, intelligence,
surveillance, and reconnaissance center. An Army official told us that, as
with the closure of Natick, no concerns were originally raised and the
recommendation was approved by the ISG, but the IEC later removed it from
the recommendation that includes the closure of Fort Monmouth because of
high cost.

o 	The proposed closure of Carlisle Barracks, Pennsylvania-home of the
Army War College-was initiated by the Education and Training Joint
Cross-Service Group and was aimed at creating synergy between the college
and Army's Command and General Staff College at Fort Leavenworth, Kansas.
The IEC approved the proposed recommendation when it was initially
briefed, but later rejected it, based on the Army's argument that among
other things, the Army War College's proximity to Washington, D.C.,
provides access to key national and international policymakers and senior
military and civilian leaders within DOD.

o 	The Education and Training Joint Cross-Service Group recommended the
closure of the Air Force Institute of Technology at Wright-Patterson Air
Force Base, Ohio. The group recommended that graduate-level education be
provided by the private sector and that all other functions of the
institute be relocated to Maxwell Air Force Base, Alabama. However, the
IEC disapproved the recommendation based on the risk involved in relying
on the private sector for education requirements, given that education is
a core competency of the department.

o 	The Industrial Joint Cross-Service Group recommended transferring the
workload of the Marine Corps' depot maintenance facility in Barstow,
California, which enabled the Department of the Navy to recommend closure
of the Marine Corps Logistics Base. The Marine Corps raised concerns over
the impact that the closure would have on Marine Corps deployments from
the West Coast. The IEC decided to downsize the base and retain the depot,
citing the Marine Corps' concerns.

o 	While the Navy recommended closure of the Naval Air Station Brunswick,
Maine, the IEC revised this to a realignment. Navy officials stated that
the senior Navy leadership had been reluctant to give up the Navy's
remaining air station in the Northeast region, but found the potential
savings significant enough to recommend closure. Navy

officials stated that the IEC relied on military judgment to retain access
to an airfield in the Northeast. Nonetheless, all aircraft and associated
personnel, equipment, and support as well as the aviation intermediate
maintenance capability will be relocated to another Navy base. The Navy is
maintaining its cold weather-oriented Survival, Evasion, Resistance and
Escape School, a Navy Reserve Center, and other small units at the air
station.

o 	While the Air Force had proposed to close Grand Forks Air Force Base,
North Dakota,43 the IEC revised this to a realignment a week before OSD
released its recommendations. The Air Force reported in its submission to
the BRAC Commission that over 80 percent of the base's personnel are
expected to be eliminated or realigned under the revised proposal. The
revision to keep the base open was made based on military judgment to keep
a strategic presence in the north central United States, with a possible
unmanned aerial vehicle mission for the base. Even though Grand Forks Air
Force Base was retained for strategic reasons, Minot Air Force Base is
also located in North Dakota and is not affected by any BRAC
rcommendation.

o 	The closure of Rome Laboratory, New York, was originally part of a
Technical Joint Cross-Service Group recommendation to consolidate the
Defense Research Laboratories. No concerns were originally raised about
the closure, and it was approved by the IEC. However, the IEC subsequently
decided to realign rather than close the laboratory to address strategic
presence and cost concerns. The realignment of Rome has a higher 20-year
net present value savings than the closure proposal because the closure
would have required more military construction and transfers of military
and civilian personnel and equipment.

Conclusions	While we believe DOD's overall recommendations, if approved
and implemented would produce savings, there are clear limitations
associated with the projected savings, such as the lack of military
end-strength reductions and uncertainties associated with other savings
estimates. DOD's recommendations would provide net reductions in space and
plant replacement value, which would reduce infrastructure costs once
up-front investment costs have been recovered but the extent some
projected space

43 The Grand Forks Air Force Base recommendation also includes the
realignment of McConnell Air Force Base, Kansas.

reductions will be realized is unclear. Other DOD savings estimates are
based on what might be broadly termed business process reengineering
efforts and other actions, where savings appear likely, but the magnitude
of savings has not been validated and much will depend on how the
recommended actions are implemented. Nevertheless, the savings could prove
difficult to track over time. As a result, DOD's projections may create a
false sense of the magnitude of the savings, with fewer resources
available for force modernization and other needs than might be
anticipated, and there may be the potential for premature budget
reductions. Given problems in tracking savings from previous BRAC rounds,
and the large volume of BRAC actions this round that are more oriented to
realignments and business process reengineering than closures, we believe
it is of paramount importance that DOD put in place a process to track and
periodically update its savings estimates.

Despite a fundamentally sound overall process, we identified numerous
issues regarding DOD's list of recommendations that may warrant further
attention by the BRAC Commission, as noted in this report and appendixes
III through XII. These include those recommendations having lengthy
payback periods, some with limited savings relative to investment costs,
and potential implementation difficulties. Given the large number of such
items for the Commission's consideration, we are not addressing them as
individual recommendations but simply referring our report in its entirety
for the Commission's consideration.

Recommendation for 	We recommend that the Secretary of Defense take
appropriate steps to establish mechanisms for tracking and periodically
updating savings

Executive Action	estimates in implementing individual recommendations,
with emphasis both on savings related to the more traditional relignment
and closure actions as well as those related more to business process
reengineering.

Agency Comments 	Cognizant officials of the military services and joint
cross-service groups reviewed drafts of the report providing us with
informal comments, permitting us to make technical changes, as
appropriate, to enhance the accuracy and completeness of the report.
Subsequently, we similarly provided complete drafts of the report to
cognizant OSD officials, obtaining and incorporating their comments as
appropriate. In providing oral comments on a draft of this report, the
Deputy Under Secretary of Defense for Installations and Environment
concurred with our recommendation.

We are sending copies of this report to Members of Congress; the
Secretaries of Defense, the Army, the Navy, and the Air Force; the
Commandant of the Marine Corps; the Director, Office of Management and
Budget; and the Chairman, Defense Base Closure and Realignment Commission.
We will also make copies available to others upon request. In addition,
the report will be available at no charge on GAO's Web site at
http://www.gao.gov.

If you or your staff have any questions about this report, please contact
me on (202) 512-5581 or [email protected]. Contact points for our Offices of
Congressional Relations and Public Affairs may be found on the last page
of this report. GAO staff who made major contributions to this report are
listed in appendix XVII.

Barry W. Holman, Director Defense Capabilities and Management

List of Congressional Committees

The Honorable John W. Warner Chairman The Honorable Carl Levin Ranking
Minority Member Committee on Armed Services United States Senate

The Honorable Ted Stevens Chairman The Honorable Daniel K. Inouye Ranking
Minority Member Subcommittee on Defense Committee on Appropriations United
States Senate

The Honorable Kay Bailey Hutchison Chairman The Honorable Dianne Feinstein
Ranking Minority Member Subcommittee on Military Construction

and Veterans Affairs Committee on Appropriations United States Senate

The Honorable Duncan Hunter Chairman The Honorable Ike Skelton Ranking
Minority Member Committee on Armed Services House of Representatives

The Honorable C.W. Bill Young Chairman The Honorable John P. Murtha
Ranking Minority Member Subcommittee on Defense Committee on
Appropriations House of Representatives

The Honorable James Walsh
Chairman
The Honorable Chet Edwards
Ranking Minority Member
Subcommittee on Military Quality of Life and Veterans

Affairs, and Related Agencies Committee on Appropriations House of
Representatives

Appendix I

Scope and Methodology

Prior to the release of the Department of Defense's (DOD) base realignment
and closure (BRAC) recommendations on May 13, 2005, we monitored the BRAC
process in a real-time environment beginning in October 2003. We sought to
assure ourselves that DOD followed an objective and consistently applied
process in which we could observe logical decision making leading to
defensible and well-documented proposed closure and realignment
recommendations. During this period, we abided by an agreement with DOD to
not disclose details of the process due to the sensitivity of the
information. Following the release of the recommendations, we continued
our analyses of the process and recommendations. With the unprecedented
large number of recommendations and the finalization of many of these
occurring in the final weeks of the process, along with the limited time
available for us to report our results following DOD's May 13, 2005,
release of the recommendations, we were not able to review all
recommendations in detail. We focused more of our attention on
cross-cutting issues than on implementation issues of individual
recommendations, but did review individual recommendations as time
permitted. Further, because of time constraints, we had only limited
opportunities to gain further insight into some of the recommendations
from officials at bases affected by the recommendations.

We performed our work primarily at the Office of the Secretary of Defense
(OSD), the military services' base closure offices, and the offices of
seven joint cross-service groups1 that were established by OSD to develop
crossservice recommendations. While we did not attend deliberative
meetings, we had access to minutes of meetings and relevant documentation
and met periodically with key staff and senior leadership to gain an
understanding of each phase of the process and to provide them with the
opportunity to address our concerns as the process was unfolding. We also
visited selected bases following the public disclosure of the Secretary's
recommendations to gain further insights into potential issues regarding
specific recommendations. Those bases included the Anniston Army Depot,
Alabama; Fort Bliss, Texas; Fort Carson, Colorado; Fort Sam Houston,
Texas; Fort Lewis, Washington; Fort Riley, Kansas; Lackland Air Force
Base, Texas; McChord Air Force Base, Washington; Marine Corps Air Station
Cherry Point, North Carolina; Naval Shipyard Portsmouth, Maine; Naval
Submarine Base Kings Bay, Georgia; Naval Submarine Base New

1 The joint cross-service groups were Education and Training, Headquarters
and Support Activities, Industrial, Intelligence, Medical, Supply and
Storage, and Technical.

Appendix I Scope and Methodology

London, Connecticut; and Red River Army Depot, Texas. We also met with
officials of the U.S. Coast Guard to discuss the impact of BRAC actions on
their operations since they are tenants on several bases recommended for
closure or realignment. We relied on DOD's Office of the Inspector
General, Army Audit Agency, Naval Audit Service, and Air Force Audit
Agency to validate the data used by the military services and joint
cross-service groups in their decision-making processes. We met with staff
of these audit agencies periodically to discuss the results of their work
as well as to observe their data validation efforts at selected locations
across the country. The DOD Inspector General and service audit agencies
issued reports that generally concluded that the extensive amount of data
used as the basis for BRAC decisions was sufficiently valid and accurate
for the purposes intended. In addition, with limited exceptions, these
reports did not identify any material issues that would impede a BRAC
recommendation.2 Where questions existed, we made further assessments and
were able to satisfy ourselves that issues raised would have limited, if
any, impact on the department's recommendations. Based on the audit
agencies' extensive validation efforts and our observation of their work,
we believe the data are sufficiently reliable for the purposes of this
report.

To determine the extent to which DOD achieved its BRAC goals, we
interviewed key officials and collected and analyzed relevant
documentation generated by OSD, the military departments, and the joint
cross-service groups. We reviewed the Secretary of Defense's November 2002
memorandum that initiated the 2005 BRAC process and highlighted DOD's
goals and obtained DOD officials' views on the degree to which the goals
were accomplished. With respect to DOD's goal of reducing excess capacity,
we initially reviewed the capacity analysis reports of the services and
joint cross-service groups to gain insight into the relative amounts of
excess capacity within the department. We subsequently reviewed major
recommendations to determine the extent to which these recommended actions
would reduce infrastructure and excess capacity. In this regard, we also
assessed the changes in the overall defense infrastructure's plant
replacement value-a measure used by the department to determine the cost
to replace an existing facility with a facility of the same size at the
same location, using today's standards-by reviewing supporting
documentation for the recommendations. We also analyzed the aggregated
estimated costs and savings associated with reducing DOD's unnecessary

2 See app. XVI for a list of relevant DOD Inspector General and military
service audit reports that were available at the time we completed our
review.

Appendix I Scope and Methodology

infrastructure, as depicted in the Cost of Base Realignment Actions
(COBRA) analyses for the 222 recommendations proposed by the department,
and compared these estimates with similar data from the prior BRAC rounds
to determine similarities and differences in sources of costs and savings
and thereby identify potential areas for further review. With respect to
DOD's costs and savings estimates, we examined selected supporting
documentation to determine the basis for the estimates and identified key
elements, such as base operating support, personnel compensation, or
recapitalization of facilities, those estimates comprised.

We also performed a qualitative analysis of DOD's performance in
addressing its other BRAC goals-transforming the infrastructure and
fostering jointness-by examining DOD's proposed recommendations and
seeking views from key officials on the relative success of achieving
these initiatives. We also compared the justification narratives
supporting individual recommendations for closures and realignments
against draft transformation options developed by the department, although
not formally adopted, that were nonetheless used by the individual
military services and joint cross-service groups. Our efforts in
addressing this and other objectives were facilitated by remote access to
selected automated databases and tracking systems, which gave us near
real-time access to relevant briefings and other documents, permitting us
to broadly track the evolution of the BRAC process and identify issues for
further consideration.

To address whether DOD's selection process for developing recommendations
was logical and reasoned, we focused on key aspects of the BRAC process,
including capacity and military value analyses. In doing so, we sought to
determine whether DOD's selection process was objective and in compliance
with key considerations of BRAC legislation. Our monitoring of the process
from the start permitted us to assess the extent to which the process
followed was logical, sequential, reasoned, and well documented. Our
monitoring permitted us to determine to what extent a logical and
sequential flow existed among all phases of DOD's selection process from
the point at which data were collected and analyzed through the
compilation of the final recommendations. We reviewed the services'
determinations of which installations to consider in the BRAC process and
analyzed the services' and joint cross-service groups' excess capacity
analyses and military value evaluation plans and analyses to determine if
they were developed in a reasoned fashion and supported by appropriate
documentation. In reviewing military value analyses, we reviewed specific
attributes established by the services and joint cross-service groups and

Appendix I Scope and Methodology

examined the linkage between the groups' methodologies and the military
value selection criteria (i.e., criteria 1 through 4) to determine if
these mandated selection criteria were addressed. Regarding the
development of recommendations, our focus was to determine whether the
recommendations were developed in a logical and reasoned manner. We
reviewed, among other things, the extent to which the services and joint
cross-service groups (1) considered various alternative proposals for
closure or realignment, (2) assessed proposed recommendations using
military value as the predominant decision-making factor, and (3)
considered the remaining four selection criteria as mandated by law.

To address issues regarding DOD's recommendations, we focused more of our
attention on cross-cutting issues than on implementation issues of
individual recommendations, but did review individual recommendations as
time permitted. We reviewed recommendation justification packages that
included particulars on the benefits of implementing the recommendations
from an operational perspective, the estimated costs and savings
associated with implementing the recommendations, and their degree of
conformity to the mandated selection criteria. We discussed perceived
benefits with key officials and reviewed appropriate supporting
documentation. We also examined financial aspects of the recommended
actions, including expected up-front investment costs to implement the
actions, length of payback periods, net present value savings or costs
over a 20-year period, and annual recurring savings or costs. In examining
the expected costs and savings as generated by DOD's COBRA model, we
further examined assumptions and specific calculations regarding specific
recommendations to determine the relative reasonableness of the estimates,
given the data available to the services and the joint crossservice groups
using the COBRA model. Further, we examined and discussed with DOD
officials the economic and community impact for selected closure and
realignment actions, including both adverse impacts associated with
closing bases as well as challenges facing bases and surrounding
communities that stand to receive large influxes of military personnel,
civilian personnel, or both. Additionally, we reviewed potential
recommendations that were approved by either the services or joint
crossservice groups but ultimately rejected by senior leadership, the
Infrastructure Executive Council, during the last few weeks of the BRAC
process. We examined the merits of these proposals as presented by the
services or joint cross-service groups in terms of addressing DOD's BRAC
goals. We further reviewed the rationale offered by senior leadership in
its decisions to reject or substantially revise the offered proposals.
Because of time limitations and complexities introduced by DOD in weaving
together

Appendix I Scope and Methodology

the unprecedented 837 closures and realignment actions across the country
into 222 recommendations, we focused more on evaluating major issues
affecting more than one recommendation than on implementation issues of
individual recommendations. However, as time permitted, we did visit
several selected installations, as noted above, to better gauge the
operational and economic impact of the proposed recommendations.
Installations visited were selected on a judgment basis because of our
desire to have additional information on issues of concern, such as those
related to costs and savings, potential operational implications, and
potential economic impact. They included a number of bases with
industrial-type activities because of concerns in prior rounds about how
well the BRAC process and the COBRA model deal with such issues and other
aspects of those facilities that permitted us to address other issues of
concern.

We conducted our work from October 2003, as DOD's process was beginning,
through June 2005, shortly after the Secretary of Defense announced his
proposed base closures and realignments, in accordance with generally
accepted government auditing standards.

Appendix II

                         Glossary of BRAC-Related Terms

The following terms were used by DOD during the 2005 BRAC process.

o 	Annual recurring savings: Savings that are expected to occur annually
after the costs of implementing a BRAC action have been offset by savings.

o 	Candidate recommendation: A scenario that a joint cross-service group
or military department has formally analyzed against all eight selection
criteria and which it recommends to the Infrastructure Steering Group and
Infrastructure Executive Council respectively for approval by the
Secretary of Defense. A joint cross-service group candidate recommendation
must be approved by the Infrastructure Steering Group, the Infrastructure
Executive Council, and the Secretary of Defense before it becomes a DOD
recommendation. A military department candidate recommendation must be
approved by the Infrastructure Executive Council and the Secretary of
Defense before it becomes a DOD recommendation.

o 	Certified data: P.L. 101-510, section 2903 (c)(5) requires specified
DOD personnel to certify to the best of their knowledge and belief that
information provided to the Secretary of Defense or the 2005 Defense Base
Closure and Realignment Commission concerning the realignment or closure
of a military installation is accurate and complete.

o 	Closure: All missions of the installation have ceased or have been
relocated. All personnel positions (military, civilian, and contractor)
have either been eliminated or relocated, except for personnel required
for caretaking, conducting any ongoing environmental restoration, and
disposing of base property.

o 	COBRA: An analytical tool used to calculate the costs, savings, and
return on investment of proposed realignment and closure actions.

o 	Force structure plan: Numbers, size, and composition of the units that
comprise U.S. defense forces, for example, divisions, air wings, aircraft,
tanks, and so forth.

o 	Infrastructure Executive Council (IEC): One of two senior groups
established by the Secretary of Defense to oversee and operate the BRAC
2005 process. The IEC, chaired by the Deputy Secretary of Defense,
composed of the Secretaries of the military departments and their chiefs
of services, the Chairman of the Joint Chiefs of Staff, and

Appendix II Glossary of BRAC-Related Terms

Under Secretary of Defense (Acquisition, Technology, and Logistics), was
the policy-making and oversight body of the entire BRAC 2005 process.

o 	Infrastructure Steering Group (ISG): The subordinate of two senior
groups established by the Secretary of Defense to oversee the BRAC 2005
process. The ISG, chaired by the Under Secretary of Defense (Acquisition,
Technology, and Logistics), and composed of the Vice Chairman of the Joint
Chiefs of Staff, the Service Vice Chiefs, Deputy Under Secretary of
Defense (Installations and Environment), and the Military Department
Assistant Secretaries of Defense (Installations and Environment), provided
oversight to joint cross-service group analyses of common business and
support functions and ensured the integration of that process with the
military departments' and defense agencies' specific analyses of all other
functions.

o 	Losing installation: An installation from which missions, units, or
activities would cease or be relocated pursuant to a closure or
realignment recommendation. An installation can be a losing installation
for one recommendation and a receiving installation for a different
recommendation.

o 	Military installation: A base, camp, post, station, yard, center,
homeport facility for any ship, or other activity under the jurisdiction
of the Department of Defense, including any leased facility. The term does
not include any facility used primarily for civil works, river and harbor
projects, flood control, or other projects not under the primary
jurisdiction or control of the Department of Defense.

o 	Military value: Referring to one or more of the first four BRAC
selection criteria, which are collectively referred to as the military
value criteria and are expected to receive priority consideration in the
analytical process that results in recommendations for the closure or
realignment of military installations within the United States.

o 	Net present value: In the context of BRAC, net present value is taking
into account the time value of money in calculating the value of future
cost and savings.

o 	Payback period: The time required for cumulative estimated savings to
exceed the cumulative estimated costs incurred in net present value terms
as a result of implementing BRAC actions.

Appendix II Glossary of BRAC-Related Terms

o 	Realignment: Includes any action that both reduces and relocates
functions and civilian personnel positions, but does not include a
reduction in force resulting from workload adjustments, reduced personnel
or funding levels, or skill imbalances.

o 	Receiving installation: An installation to which missions, units, or
activities would be relocated pursuant to a closure or realignment
recommendation. An installation can be a receiving installation for one
recommendation and a losing installation for a different recommendation.

o 	Scenario: A proposal that has been declared for formal analysis by a
military department or joint cross-service group deliberative body. The
content of a scenario is the same as the content of a proposal. The only
difference is that it has been declared for analysis by a deliberative
body. Once declared, a scenario was registered at the ISG by inputting it
into the ISG BRAC Scenario Tracking Tool.

o 	Surge: A term incorporated in one of the military value selection
criteria for the 2005 BRAC round: "the ability to accommodate contingency,
mobilization, surge, and future total force requirements." The term is not
otherwise defined and application of the term can vary by specific
operational or support categories.

o 	Transformation: According to the department's April 2003 Transformation
Planning Guidance document, transformation is "a process that shapes the
changing nature of military competition and cooperation through new
combinations of concepts, capabilities, people, and organizations that
exploit our nation's advantages and protect against our asymmetric
vulnerabilities to sustain our strategic position, which helps underpin
peace and stability in the world."

Appendix III

The Department of the Army Selection Process and Recommendations

The Army generally followed the common analytical framework established by
the Office of the Secretary of Defense (OSD) for reviewing its active
component installations and followed a separate parallel process for its
reserve components installations. Compared to prior rounds, the Army's
process produced a record number of 56 recommendations, with 44 of them
directed to its reserve components and 12 directed to the active
component, recognizing that many of the individual recommendations contain
multiple closure and realignment actions. The 44 reserve components
recommendations involved realignment or closure actions that could have
been approved outside of the BRAC process, but the Army and DOD decided to
include them as part of DOD's efforts to aid transformation through the
base realignment and closure process.1 Unlike the other military services
and joint cross-service groups, the Army's recommendations, while
producing estimated net annual recurring savings of nearly $500 million
after 2011, are not expected to achieve overall net savings over the
20-year period typically used to measure net savings from BRAC actions.
Over this 20-year period, the Army expects to incur a net present value
cost over $3 billion, which is due primarily to the very large up-front
costs in a few recommendations that are necessary to return forces to the
United States under DOD's Integrated Global Presence and Basing Strategy.2
However, the financial outlook for the Army improves if joint
cross-service recommendations involving Army bases are considered-these
separately reported actions are expected to produce $10.7 billion in net
present value savings over a 20-year period. Payback periods-the time
required for savings to offset closure costs-for the active component
recommendations are projected to average 2.5 years

1 BRAC legislation establishes specific thresholds that require decisions
regarding the closure or realignment of U.S. domestic military
installations to be made under the BRAC process. Accordingly, decisions to
close domestic U.S. military installations with authorization for at least
300 civilian personnel or to realign domestic U.S. military installations
authorized at least 300 civilian personnel that involve a reduction of
more than 1,000 or 50 percent in the number of civilian personnel
authorized must undergo the BRAC process. See P.L. 101-510, section 2909.

2 The Integrated Global Presence and Basing Strategy (IGPBS) refers to
DOD's effort to evaluate the global posture of the armed forces, which in
part recommended the return of U.S. forces from Europe and Korea. The
Army's BRAC 2005 report indicates that had it been able to include savings
expected from closing overseas bases and restationing overseasbased
personnel to the United States, its recommendations related to these
actions would have achieved a net savings. However, DOD determined, and we
agree, that the inclusion of such savings based on overseas base closures
in BRAC is not appropriate, because the BRAC process was established to
consider only the closure or realignment actions involving domestic U.S.
military installations and not U.S. military installations located in
foreign countries.

 Appendix III The Department of the Army Selection Process and Recommendations

with a range of immediate to no payback, and average 12.3 years with a
range of immediate to more than 100 years for the reserve components. We
believe some of the Army's recommendations may warrant additional
attention from the BRAC Commission due to the likelihood of overstated
savings projections associated with military personnel eliminations,
uncertainties regarding overseas restationing of forces to the United
States and other ongoing force structure changes, challenges facing
communities surrounding bases that are gaining large numbers of personnel,
the bundling of various recommendations, various unknowns associated with
implementing the reserve components' recommendations, and issues regarding
the proposed closure of the Red River Army Depot in Texas. The Army Audit
Agency, which performed audits of the data used in the process, concluded
that the data were sufficiently reliable for use in BRAC.

Organization and Focus

The Army established a Senior Review Group, headed by the Vice Chief of
Staff of the Army and the Under Secretary of the Army and comprising
senior Army military and civilian personnel, responsible for assessing
potential recommendations for consideration by the Secretary of the Army,
who in turn was to forward recommended actions to the Infrastructure
Executive Council (IEC) for approval.3 This group was supported by The
Army Basing Study Group, headed by the Deputy Assistant Secretary of the
Army for Infrastructure Analysis, which was responsible for collecting and
analyzing data and developing recommendations. In addition, subject matter
experts and representatives from the Army's major commands provided
expertise and input throughout the BRAC process.

The Army's broadly stated goals for BRAC 2005 were to enhance the
capabilities of a transforming Army while aligning its infrastructure to
meet its post-Cold War force structure and eliminating excess physical
capacity to provide ready combat power to Combatant Commanders. Some key
planning and strategy documents provided guidance in the pursuit of Army
goals. The Army Stationing Strategy, for example, provided an overall
vision, principles, and goals relative to future basing decisions while
DOD's Strategic Planning Guidance helped to define objectives regarding
soldiers' well-being. In further defining its goals, the Army identified
the capabilities and missions that its installations require to support
its forces in the future. With these needs in mind, the Army set out
numerous objectives, such as:

3 At OSD, the Infrastructure Steering Group (ISG) and the Infrastructure
Executive Council (IEC) provided overall coordination and direction to the
DOD-wide process.

 Appendix III The Department of the Army Selection Process and Recommendations

o 	locate Army forces and materiel (at critical installations) to enhance
deployment and redeployment;

o 	relocate forces in accordance with the Integrated Global Presence and
Basing Strategy;

o 	reshape installations to support home station mobilization and
demobilization;

o 	reshape reserve components infrastructure to improve efficiency of
mobilization and demobilization; and

o 	provide sufficient area and facilities (with varied terrain, climate,
and airspace) to support institutional training, combat development, and
doctrine development.

Framework for Analysis

The Army's BRAC analysis included a review of 87 active component
installations and 10 leased facilities. A separate effort was undertaken
to review over 4,000 Army National Guard and Army Reserve facilities to
explore infrastructure consolidation opportunities that would afford the
reserve components better facilities and enhance, among other things,
training and operations.4 Army officials indicated that differences in the
objectives and the nature of facilities associated with the active and
reserve components infrastructure made it impractical to use identical
review and decision-making processes. As with previous BRAC rounds,
capacity and military value analyses provided the starting point for the
Army's decisionmaking process. A key focus in the Army's efforts was to
preserve large maneuver areas to ensure that future training requirements
could be met and to relocate missions and personnel from small,
single-function installations to larger, multi-function installations. The
Army Audit Agency played an important role in helping to ensure data
accuracy through extensive audits of data gathered at various locations.

4 In a May 2003 report, we noted the challenges that the Army faces in the
funding of its reserve component facilities due to budget coordination
difficulties. See GAO, Defense Infrastructure: Changes in Funding
Priorities and Management Processes Needed to Improve Condition and Reduce
Costs of Guard and Reserve Facilities, GAO-03-516 (Washington, D.C.: May
15, 2003). According to Army officials, BRAC provides them an opportunity
to overcome these challenges.

 Appendix III The Department of the Army Selection Process and Recommendations

The Army's BRAC process was made more challenging by two ongoing force
structure and basing initiatives-the rebasing of thousands of Army forces
and their families to the United States as a result of the Integrated
Global Presence and Basing Strategy and the restructuring of the Army's
forces under its modularity5 program-that were to be integrated into the
BRAC process.

Capacity Analysis	The Army initiated its capacity analysis by collecting
capacity-related data for its active duty installations (e.g., buildings,
land) based on 28 capacity metrics, such as buildable acres, maneuver
areas, and instructional facilities. In calculating capacity excesses or
shortages through a comparison of the physical capacity data with
requirements, the Army considered a surge capability to ensure that
sufficient capacity existed to meet unforeseen military contingencies,
future threats, and future needs as outlined in DOD's 20-year force
structure plan. The Army's surge analysis also reinforced the importance
of preserving assets such as maneuver land that would be difficult to
reconstitute if eliminated. Table 8 shows selected Army's capacity results
for 7 of 12 mission areas, as presented in the Army's BRAC 2005 report.

5 Modularity refers to the Army Modular Force Initiative whereby the Army
is transforming its force structure by increasing from 67 brigade combat
teams to 77 modular brigade combat teams (43 active Army and 34 Army
National Guard) with the potential for 48 active Army modular brigade
combat teams.

Appendix III The Department of the Army Selection Process and
Recommendations

Table 8: Excess Capacity Identified by the Army for Selected Mission Areas

                                                                   Percentage 
                                                                    of excess 
                                                                     capacity 
                    Mission      Capacity metrics                  (shortage) 

                     Deployment           Fixed wing runway, surfaced    28.6 
                                             Aircraft apron, surfaced  (17.9) 
                   Mobilization              Vehicle maintenance shop  (20.3) 
                                Annual training/mobilization barracks  (56.9) 
         Institutional training      General instructional facilities         
                            and                                         (8.4)
                      education      Applied instructional facilities  (18.6) 
                     Well-being               Medical center/hospital 
                                                      Dental facility   (6.9) 
                                     Enlisted unaccompanied personnel   (6.3) 
                                                              housing 
                                                     Education center   (4.5) 
                                      Nursery and child care facility  (43.5) 
                Joint logistics                     Depot maintenance    24.7 
                                                 Armaments production   219.9 
                                                   Ammunition storage    65.9 
              Command, control,          General administrative space 
                  computers and    Small unit headquarters Large unit  (41.9) 
                communications/                          headquarters  (11.5) 
                   headquarters                                       
         Research, development,       Specialized training facilities    61.9 
            test and evaluation                                       

Source: GAO analysis of the Department of the Army data.

As shown in table 8, some areas, such as armaments production and
ammunition storage, had excess capacity ranging from about 5 percent to
about 220 percent while other areas had shortages. Further, the Army
reported that it had a service-wide excess of over 1.5 million square feet
of general administrative space even though 35 installations reported
shortages. While the Army's BRAC report did not indicate the overall
impact the Army's proposed closure and realignment recommendations would
have on reducing excess capacity, Army officials projected that its
proposed actions would reduce excess general administrative space by over
1 million square feet while realigning Army units to better match the
remaining capacity.

 Appendix III The Department of the Army Selection Process and Recommendations

While the overall capacity excesses and shortages, identified by
installation, provided insights for potential closures or realignments,
the Army subsequently conducted more detailed capacity analyses that
identified the types of facilities and training lands that were required
to support various units (e.g., light and heavy maneuver brigades, small
and large training schools). In this manner, the Army had the ability to
determine which installations could handle additional missions and units
and what infrastructure improvements and additional military construction
might be required to support those units.

The Army did not perform a similar capacity assessment of the reserve
components' facilities because of the nature of their facilities and
differing objectives, but did collect and assess data related to, for
example, the condition and location of facilities, as well as expected
costs such as construction and force protection upgrades that may be
necessary to provide for viable reserve consolidation opportunities. Prior
to the collection of this data, the Army sought interest from the state
Adjutant Generals of the National Guards for units in each state
participating in such efforts on a voluntary basis.

Military Value Analysis	The Army's military value analysis focused on a
set of 40 attributes, such as maneuver land, and housing availability for
its soldiers and dependents, that are characteristics the Army considered
desirable for its installations to meet Army needs. Attributes with less
flexibility for change, such as the availability of maneuver land or
direct fire ranges, were among those most highly valued in developing a
scoring plan for evaluating the military value for each of the Army's
installations. According to Army officials, this reflected their view of
the criticality of possessing adequate acreage to conduct unit training,
particularly in view of the expectation for an increase in the number of
brigades and return of various forces from overseas locations. The Army's
military value attributes also reflected consideration of its role in
supporting the global war on terrorism, homeland defense, and
transformation.6 Through a process of weighting each of the Army's
attributes, the Army derived relative weights for the four

6 DOD defines transformation as "a process that shapes the changing nature
of military competition and cooperation through new combinations of
concepts, capabilities, people and organizations that exploit our nation's
advantages and protect against asymmetric vulnerabilities to sustain our
strategic position, which helps underpin peace and stability in the
world."

Appendix III The Department of the Army Selection Process and
Recommendations

legislatively-mandated military value selection criteria. As shown in
table 9, three of the four criteria had relatively higher weights than the
remaining criterion dealing with cost and manpower implications. Imbedded
within these criteria was a key focus on the need for availability of
existing land and facilities for expansion purposes to address the needs
as cited in those specific criteria. In this regard, the Army placed high
value on these criteria as a hedge against uncertain future requirements
and to ensure that they did not dispose of assets such as large tracts of
land, which would be difficult to reacquire.

                 Table 9: Army Military Value Criteria Weights

                             Figures in percentages

Criteria

1. The current and future mission capabilities and the impact on
operational readiness of the total force of the Department of Defense,
including the impact on joint warfighting, training, and readiness.

2. The availability and condition of land, facilities, and associated
airspace (including training areas suitable for maneuver by ground, naval,
or air forces throughout a diversity of climate and terrain areas and
staging areas for the use of the Armed Forces in homeland defense
missions) at both existing and potential receiving locations.

3. The ability to accommodate contingency, mobilization, surge, and future
total force requirements at both existing and potential receiving
locations to support operations and training.

4. The cost of operations and the manpower implications.

                                   Total 100

Source: DOD and Department of the Army.

Note: The system of weights provided a basis for assigning relative value
to data collected and tabulated across each military value dimension.

In performing its military value assessment, the Army assessed each active
duty installation and ranked each of them across the four military value
selection criteria to more fully evaluate the potential for realignment
and closure actions. This contrasted with the approach the Army used in
the 1995 BRAC round when it developed a military value ranking for
individual installations under one of 13 mission categories, which made it
more difficult to assess an installation for use in a different mission
area. For this round, the Army assessed the military value of each of its
installations based on a common framework that linked attributes, metrics,
and data call questions to military value as shown in figure 9.

 Appendix III The Department of the Army Selection Process and Recommendations

Figure 9: Selected Attributes, Metrics, and Data Questions Used to Assess
Military Value of an Army Installation

Source: GAO analysis of Army data.

aThe BRAC military value criteria are the first four BRAC selection
criteria.

bMilitary value attributes are characteristics of each criterion. The Army
used a total of 40 attributes.

cMilitary value metrics are measures for the attributes. The Army used
over 80 metrics.

dThe Army used over 80 data call questions.

During its assessment, the Army stressed multi-function capabilities for
installations. To account for the unique capabilities that some Army
singlefunction installations provided, the Army applied military judgment
to modify the initial ranking of its installations to better identify
installations that the Army believed were best suited to meet its current
and future capabilities. For example, the Tripler Army Medical Center in
Hawaii, which initially ranked low in military value, is DOD's only
medical center of significant size in the Pacific and therefore was
retained for strategic reasons. Ultimately, the Army moved nine
installations higher in the list based on their unique capabilities.7
Subsequently, those installations with a

7 The nine installations were Holston, Radford, and Lake City Army
Ammunition Plants; Watervliet Arsenal; Military Ocean Terminal Sunny
Point; Forts Myer and Detrick; and Tripler and Walter Reed Army Medical
Centers.

 Appendix III The Department of the Army Selection Process and Recommendations

lower military value ranking became more vulnerable to closure or
realignment actions.

With respect to its reserve components, the Army did not perform a
military value rank-ordering of these various installations across the
country, but instead assessed the relative military value that could be
obtained by consolidating various facilities into a joint facility in
specific geographical locales to support, among other things, the reserve
components' training, recruiting, and retention efforts.

Army Audit Agency's Role in the Process

Throughout the BRAC process, the Army Audit Agency advised the Army on the
development and implementation of its internal control procedures;
performed audits of the Army's conduct of the process, including the
validation of data and various models used to assist in decision making.
During the capacity and military value data calls, the Army Audit Agency
performed on-site audits of data collection efforts at various
installations on a sample basis to validate the data being gathered.
Instances of inaccurate data or inadequate source documentation identified
during these audits were generally corrected by the Army. As a result, the
auditors generally found the data to be sufficiently reliable for use in
the BRAC process.

Identification and Assessment of Alternate Scenarios and Selection of
Recommendations

The Army used the results of its capacity and military value analyses,
along with the 20-year force structure plan, as the foundation for the
development of hundreds of potential closure and realignment scenarios.
Scenarios under consideration were refined using various models- primarily
an optimization model and the Cost of Base Realignment Actions (COBRA)
model-along with military judgment. The optimization model, using capacity
data, military value scores, and other data, provided the Army with
various competing, plausible alternatives associated with the restationing
of various missions and forces within the infrastructure. The model
provided for alternative scenarios and their impact on overall military
value as functions were moved to higher ranked installations. The COBRA
model, which was used by all military services and joint crossservice
groups to address the fifth selection criterion regarding costs and
savings, provided the Army with the relative cost and savings estimates of
these various alternatives.

Appendix III The Department of the Army Selection Process and
Recommendations

The Army further assessed the various scenarios in terms of the remaining
selection criteria 6 through 8, regarding the economic impact on
communities affected by BRAC, the ability of the infrastructure within
communities to support military missions, and the environmental impact of
the BRAC actions, respectively. The Army used input from various
DODgenerated models in assessing its scenarios against these criteria,
which, while important and mandated by the BRAC legislation, played less
of a role than that of military value. However, the Army considered these
criteria in order to ensure that there were no insurmountable challenges
that would derail the implementation of any particular scenario. In
addition, they were used to differentiate between competing scenarios. For
example, the Army determined its final stationing of modular brigades
based in part on its assessment of the environmental impact these brigades
would have on the receiving installations.

The Army also integrated into the overall process those scenarios that had
been generated for the reserve components in the parallel process referred
to previously. Those scenarios were developed through a series of meetings
with state officials across the country. As with the active component, the
reserve component scenarios were assessed using the COBRA model and other
models.

The Army also worked closely with the joint cross-service groups as they
developed recommendations that affected Army installations. In some cases,
the Army developed scenarios that were provided to the joint crossservice
groups for further consideration. For example, the Army developed initial
scenarios proposing to close three chemical demilitarization facilities,
which were subsequently provided to the Industrial Joint Cross-Service
Group, which ultimately developed and processed recommendations for these
closures. Alternatively, some scenarios which ultimately became Army
recommendations were developed in conjunction with the joint cross-service
groups. For example, the Industrial Joint Cross-Service Group's scenario
regarding the realignment of the depot maintenance workload out of the Red
River Army Depot in Texas, was instrumental in leading to an ultimate Army
recommendation to close the depot. Similarly, the Education and Training
Joint Cross-Service Group developed a scenario to realign the Army's Armor
Center and School from Fort Knox, Kentucky to Fort Benning, Georgia, an
action that was later folded into the Army's broader realignment of Fort
Knox. As the Army and cross-service group recommendations were being
finalized, the Army held a series of meetings with the joint cross-service
groups to ensure that all

 Appendix III The Department of the Army Selection Process and Recommendations

recommended actions involving Army installations were properly integrated
and corresponding impacts were considered in their entirety.

Recommendations 	The Army produced 56 recommendations8 that were approved
by DOD-6 closures of active component installations, 6 realignments of
active

Approved by DOD	component installations, and 44 recommendations consisting
of multiple reserve components closure and realignment actions grouped by
state or region. These recommendations, along with other Army-related
recommendations produced by the joint cross-service groups, align, for the
most part, with the Army's objectives of reducing the number of primarily
single-function, smaller installations and transforming the infrastructure
to better meet current and expected future Army needs. Table 10 provides
the financial implications of the Army's recommendations.

           Table 10: Financial Aspects of the Army's Recommendations

Fiscal year 2005 constant dollars in millions Reserve Componentsc Army-25 to 120
               ($2,856.8) ($1,557.4) $322.8 12.3 average $1,598.6

                                                  Net annual          20-year 
                                                                          net 
                                              Net recurring  Payback  present 
                        One-time                                        value 
                                   implementation (costs) or  period  (costs) 
                    DOD                                                       
Installations report          (costs) or                                or 
                   page  (costs) savingsa          savings   (years) savingsb

        Close Fort Monmouth, NJ Army-11 (822.3) (395.6) 143.7 6 1,025.8

        Realign Maneuver Trainingd Army-20 (773.1) (244.1) 123.3 5 948.1

           Close Fort McPherson, GA Army-8 (197.8) 111.4 82.1 2 895.2

            Close Fort Monroe, VA Army-19 (72.4) 146.9 56.9 1 686.6

      Close Red River Army Depot, TX Army-16 (456.2) (216.6) 76.5 4 539.0

             Close Fort Gillem, GA Army-6 (56.8) 85.5 35.3 1 421.5

Close U.S. Army Garrison (Selfridge) Army-106 (9.5) 91.4 18.1 immediate
260.9 MI

  Realign Single Drill Sergeant Schoole Army-105 (1.8) 7.6 2.5 immediate 31.3

             Realign Fort Wainwright, AK Army-5 (0.1) 0.2 0.1 2 0.7

      Realign Fort Bragg, NC Army-10 (334.8) (446.1)f (23.8) never (639.2)

8 These recommendations represent only those produced by the Army as
detailed in DOD's 2005 BRAC report. In addition, the various joint
cross-service groups produced various recommendations that affected Army
installations. Those recommended actions are detailed in the appropriate
appendices in this report.

 Appendix III The Department of the Army Selection Process and Recommendations

(Continued From Previous Page)

                 Fiscal year 2005 constant dollars in millions

                                      Net annual recurring (costs) or savings

Payback period (years)

                                20-year net present value (costs) or savingsb

                         Installations DOD report page

One-time (costs)

                                       Net implementation (costs) or savingsa

       Realign Fort Hood, TX Army-15 (435.8) (579.5) (45.3) never (980.4)

  Realign Operational Army (IGPBS)g Army-22 (3,946.0) (5,229.0) (294.7) never
                                   (7,826.7)

                 Total ($9,963.4) ($8,519.1) $497.6 ($3,038.6)

Source: GAO analysis of DOD data.

aThis represents net costs or savings within the 6-year implementation
period required to implement BRAC recommendations.

bDOD used a 2.8 percent discount rate to calculate net present value.

cThe Army produced 44 recommendations realigning its reserve components,
which are combined into one entry in the table.

dThis recommendation primarily stations a modular brigade and some
overseas forces at Fort Knox, Kentucky while realigning the Armor Center
and School to Fort Benning, Georgia.

eThis recommendation realigns the drill sergeant schools from Fort
Benning, Georgia and Fort Leonard Wood, Missouri to Fort Jackson, South
Carolina.

fThe Army BRAC 2005 report mistakenly reported this figure as a savings
rather than a cost. The Army subsequently issued a correction.

gThis recommendations primarily restations some overseas forces at Fort
Bliss, Texas and Fort Riley, Kansas.

As shown in table 10, the Army's recommendations are expected to produce
nearly $500 million in estimated net annual recurring savings beginning in
2012, but have a large 20-year net present value cost of about $3 billion,
rather than savings which are typically expected in that timeframe; this
is due primarily to very large up-front costs, nearly $10 billion in
expected one-time costs, that are required to implement the
recommendations. A few of the recommendations, particularly the one
involving the redeployment of Army forces to the United States under DOD's
Integrated Global Presence and Basing Strategy, are responsible for the
high costs and negative returns.

The recommended closures of 6 active duty installations, which are largely
installations of lower military value within the Army, have the greatest
potential for savings with a combined estimated net present value savings
over the next 20 years of about $3.8 billion and payback periods of 6
years or less. Most of the expected savings from these recommendations are
due to reductions in personnel costs and overhead (e.g., base operations
support). Expected personnel savings from these 6 recommendations are
driven by the elimination of nearly 3,500 personnel of which nearly 25
percent, or over 800, are military.

Appendix III The Department of the Army Selection Process and
Recommendations

While 3 of the remaining 6 active duty base realignment recommendations as
shown in table 10 also produce savings, 3 recommendations account for more
than $9.4 billion in 20-year net present value costs and will never
payback. The largest of these three latter recommendations involves the
rebasing of Army forces to the United States from overseas locations. The
Army projected that this realignment alone has a one-time cost of about $4
billion and annual recurring costs of almost $300 million and will never
produce savings. Army officials note that a contributory factor to these
high costs is the fact that the Army could not claim the estimated savings
that would accrue from the expected closure of the overseas installations
and the departure of Army forces from those locations. The Army estimates
that had these estimated savings been accounted for in BRAC, the
recommended actions would have produced substantial net savings rather
than the costs as indicated. We did not validate the Army's savings
estimates for the overseas closures, and it is not clear to us that
sufficient information is available at this time to fully assess the total
changes in overseas basing costs since much of the detail regarding these
plans has not been finalized. Further, we agree with DOD that it would not
be appropriate for the Army to include these particular savings in BRAC as
BRAC provisions in existing legislation do not contemplate consideration
of savings from the closure or realignments that take place outside of the
United States.9

With regard to the reserve components, the Army adopted 44
recommendations, which taken as a whole, would provide a net present value
savings of over $1.5 billion over the next 20 years but have an average
payback period of over 12 years. Five of the recommendations involve the
realignment of the Army Reserve's command and control structure within
five regional areas. The remaining recommendations realign reserve
components facilities in 38 states and Puerto Rico by constructing 125 new
armed forces reserve centers while closing 176 Army Reserve centers and
with the understanding that various states would close 211 National Guard
armories and centers.10 These closures represent about 10 percent of the
over 4,000 existing Army reserve components' facilities across the
country.

9 For purposes of BRAC 2005 actions, the United States is defined under
P.L. 101-510, section 2910(7) as the 50 states, District of Columbia, the
Virgin Islands, American Samoa, Commonwealth of Puerto Rico, and any other
commonwealth, territory, or possession of the United States.

10 In addition, some of these armed forces reserve centers are expected to
include some reserve activities from the other services.

 Appendix III The Department of the Army Selection Process and Recommendations

While most of the Army's projected savings associated with the reserve
components' recommendations result from reductions in personnel costs by
eliminating over 4,000 personnel, about 80 percent of these eliminations
are military personnel.

Issues Identified with Approved Recommendations

Time did not permit us to assess the operational impact of each
recommendation, particularly recommendations that included multiple
closure and realignment actions across multiple locations. However, we
offer a number of broad-based observations about the proposed
recommendations. Some recommendations may warrant additional attention
from the BRAC Commission based primarily on issues associated with the
projected savings from military personnel reductions, uncertainties
regarding the rebasing of overseas forces and modularity, potential impact
of expected increase in the use of training ranges, the impact on gaining
communities, uncertainties regarding the reserve component
recommendations, the bundling of various recommendations, and concerns
over the transfer of workload from Red River Army Depot, Texas.

Military Personnel Reductions

Our analysis showed that about $450 million of the Army's projected annual
recurring savings from its recommended closure and realignment actions are
based on claimed savings from eliminating military personnel. Army
officials acknowledged that a large portion of their annual recurring
savings were derived from military personnel eliminations but noted that
the Army's financial outlook improved if joint cross-service group
recommendations involving Army bases are considered. Nevertheless, the
Army does not plan to reduce its active or reserve component end-strength
in implementing these recommendations. According to Army officials, these
personnel are being redistributed within the Army. While we believe that
the potential exists for these personnel to provide a benefit to the Army
in their new positions, it represents a savings to the Army in the sense
of potentially avoiding costs that otherwise might be incurred in
increasing authorized end strength levels. They do not represent dollar
savings that might be shifted to other appropriations to meet other
priority needs such as equipment modernization or improving remaining
facilities, areas typically cited as likely beneficiaries of BRAC savings.
Further, because DOD envisions BRAC savings in general to be used to
partially fund up-front investment costs associated with implementing BRAC
actions, the Army may be forced to find other sources of funding as
military

 Appendix III The Department of the Army Selection Process and Recommendations

personnel savings will not likely be available for this purpose. The
Commission may wish to consider this issue in evaluating the BRAC
recommendations.

Uncertainties regarding the Rebasing of Army Overseas Forces to the United
States and Force Structure Changes due to Modularity

Uncertainties over plans to realign thousands of soldiers and their
families to the United States as a result of the Integrated Global
Presence and Basing Strategy as well as the Army's modularity efforts to
create new modular brigades have the potential to change the expected
costs and savings associated with the Army's BRAC recommendations. The
Army's BRAC recommendations incorporate about 15,000 of the 47,000 Army
personnel currently expected to return as a result of the global basing
study.11 The Army also incorporated the stationing of five of ten brigades
being created under the Army's modular restructuring effort.12 Estimated
BRAC costs and savings are typically calculated based on assumptions for
specific units or missions that are expected to realign to specific
installations in specific years. Changes to these assumptions can alter
the costs and savings associated with the actions being undertaken.
Existing Army plans for the return of overseas forces and modularity were
the basis for the assumptions used to calculate estimated costs and
savings and to determine potential impacts to the environment and
communities surrounding the affected installations. However, our analysis
identified several areas of uncertainty that could affect the assumptions
contained in those recommendations:

o 	Army officials told us that DOD has been and is continuing to modify
its overseas restationing plans, even as the Army BRAC recommendations
were being finalized. Because of BRAC reporting requirements, the

11 According to Army officials, the return of 15,000 soldiers was directly
incorporated into the Army's BRAC recommendations, including the 1st
Armored Division headquarters and three heavy maneuver brigades from
Germany to Fort Bliss, the 1st Infantry Division headquarters, division
support command, and aviation brigade to Fort Riley, and military police,
engineer, and logistical units to Fort Knox, Kentucky. The Army also
validated existing plans to restation about 10,000 soldiers to Schofield
Barracks, Hawaii; Fort Lewis, Colorado; and Fort Carson, Colorado. The
remaining 22,000 soldiers will return to the United States individually to
be restationed as part of the Army's force restructuring effort (called
modularity).

12 The Army's current modular force restructuring plan calls for the
creation of ten modular brigades within the United States by year 2006,
with the possibility of an additional five modular brigades beyond then.
As part of its BRAC analysis, the Army validated existing stationing
decisions for five of the ten new modular brigades and incorporated the
stationing of the remaining five modular brigades into four of its BRAC
recommendations.

Appendix III The Department of the Army Selection Process and
Recommendations

Army had to finalize its recommendations before the overseas rebasing
plans were finalized. Army officials indicated that the major overseas
restationing actions included in the BRAC recommendations are expected to
occur as currently envisioned. However, as plans continue to evolve, the
specific details regarding the rebasing could be adjusted, with
corresponding adjustments in costs and savings being required.

o 	In a May 2005 report produced by the Commission on Review of the
Overseas Military Facility Structure of the United States,13 the
Commission recommended slowing down the Army's entire overseas
restationing process. If DOD heeds this recommendation, the timing of some
planned restationing actions could be affected with the potential risk of
not completing BRAC closure or realignment actions within the 6-year
implementation period with a 2011 completion date as established by the
BRAC legislation. Further, over half of the Army's forces returning from
overseas are expected to be folded into the new modular brigades being
formed in the United States. Uncertainties over the timing of their return
could also impact the costs and savings associated with those brigades.

o 	In a March 2005 congressional testimony, we reported that the design
configuration of the Army's modular brigades had not been finalized at
that time.14 In this regard, the Army is considering adding an additional
combat battalion to each of its modular brigades and has not finalized the
design of higher echelon and support units. Any such changes to the design
that was used in deriving the cost and savings estimates and potential
impacts to the environment and communities of the recommended actions are
likely to impact the estimates and may alter the potential impacts as
well.

The Commission may wish to ensure that it has the Army's latest plans
regarding the overseas rebasing and modularity efforts in reviewing the
Army's recommendations.

13 This commission, also known as the Overseas Basing Commission, was
established by Congress in 2003. See P.L. 108-132, section 128 (Nov. 22,
2003). It was created to evaluate, among other things, the current and
proposed overseas basing structure of the U.S. military forces. The
Commission's observations are included in the Report of the Commission on
Review of the Overseas Military Facility Structure of the United States
(Washington, D.C.: May 9, 2005).

14 GAO, Force Structure: Preliminary Observations on Army Plans to
Implement and Fund Modular Forces, GAO-05-443T (Washington, D.C.: Mar. 16,
2005).

 Appendix III The Department of the Army Selection Process and Recommendations

Potential Impact on Training Ranges

The Army's BRAC recommendations provide for the stationing of returning
overseas forces and new modular brigades on existing Army installations.
Our review of Army documentation shows these installations are already
facing environmental and encroachment issues that constrain their ability
to meet unit training requirements. These issues raise concerns that
currently constrained installations may face additional challenges and
unexpected costs in meeting the training requirements of the additional
forces the Army plans to station at these installations. As we reported in
June 2005, several of the Army's training ranges already face challenges
resulting from inadequate maintenance and modernization and may also
require substantial investment for modernization to support the training
requirements of the new brigades.15 Army officials stated they reviewed
their BRAC recommendations to ensure that there were no insurmountable
environmental or encroachment obstacles. They also noted that their
recommendations included costs for training range upgrades. However, we
have not validated whether these costs will adequately address training
range limitations. Further, we have concerns as to whether the Army will
need to acquire additional training range land at existing bases that are
already experiencing range limitations-a potential cost not identified in
the current BRAC recommendations.

Concerns over the ability of existing training ranges to meet training
requirements are exacerbated by uncertainties over the final number and
composition of the modular brigades as well as the potential for
additional forces returning from overseas. Because of existing constraints
on training ranges, the Army developed scenarios to examine the
possibility of stationing operational Army units on other installations,
including installations belonging to other military services and Army
installations with considerable acreage such as the Yuma Proving Ground in
Arizona. The Army deemed none of these scenarios feasible for various
reasons, such as the configuration of other service installations and
their associated training ranges did not meet Army training requirements.
For other scenarios, such as use of the Yuma Proving Ground, the lack of
adequate infrastructure and the associated high military construction
costs that would be required essentially made them infeasible. However,
Army officials told us that should the Army decide to create an additional
five modular brigades or bring additional forces back from overseas, it
may

15 GAO, Military Training: Better Planning and Funding Priority Needed to
Improve Conditions of Military Training Ranges, GAO-05-534 (Washington,
D.C.: June 10, 2005).

 Appendix III The Department of the Army Selection Process and Recommendations

become necessary to station these units at installations such as the Yuma
Proving Ground, which has large tracts of land, because existing Army
installations might not be able to support these additional units. The
Commission may wish to review the Army's plan for addressing training
range issues and the potential need to acquire additional land to mitigate
likely challenges the Army faces in the probable increased use of its
training ranges.

Impact on Gaining Communities

Several of the Army's recommendations involve relocating significant
numbers of forces and their families to various installations, which
raises concerns about the ability of local communities to adapt to these
changes and absorb these personnel increases. For example, Fort Bliss,
Texas is expected to receive a net gain of over 11,000 military and
civilian personnel. The full impact of such increases on surrounding
communities, particularly on schools, housing, and other community
infrastructure, is unclear at this time. According to Army officials, its
analysis for the selection criterion regarding community impact (criterion
seven) provided an overall assessment of the ability of local communities
impacted by a potential BRAC action to handle additional personnel and
their families, including the identification of potential obstacles that
could prevent a recommendation from being implemented. For example, in
assessing the impact of the return of forces from overseas, the Army's
review of community infrastructure for Fort Bliss and Fort Riley indicated
the importance of working with these communities to assess and implement
housing and schooling requirements. However, the Army concluded that these
issues did not represent impediments to implementing recommendations
involving these bases.

Addressing the challenges that these communities face may require
significant investments, particularly with regard to available housing and
schools, which would increase pressures for federal assistance from
various agencies to help mitigate these needs. While such costs might be
borne outside the defense budget to some extent, they would nevertheless
represent additional costs to the federal government. These potential
costs, although not required to be captured in DOD's cost and savings
analyses for the various recommended actions, could be substantial, given
the number of Army installations with expected personnel gains. Army
officials stated that they expect to resolve these issues during
implementation and that by staggering the movement of units being moved to
these installations, they believe they will be able to reduce adverse
impacts and enable communities to better prepare for their arrival.
Nevertheless, some

 Appendix III The Department of the Army Selection Process and Recommendations

communities may lack the infrastructure to easily absorb these forces.
This could impact the timing of the movement of forces to these
communities, which in turn could alter current BRAC cost and savings
estimates from a governmentwide perspective. The Commission may want to
review the Army's plans for addressing these issues.

Uncertainties regarding State Involvement in the Reserve Components'
Recommendations

We identified a number of uncertainties associated with the Army's reserve
components' recommendations. Most of these recommendations, as detailed in
the Army's 2005 BRAC report, are contingent upon certain actions that have
either yet to take place or be decided. For example, the Army expects to
build 125 Armed Forces Reserve Centers, which are currently expected to be
able to accommodate National Guard units as well as Army Reserve units and
some reserve units from the other military services. However, the decision
to relocate these National Guard units lies with state authorities. While
the states with Guard units that are affected by BRAC recommendations have
agreed, on a voluntary basis, to be included in the process, they can opt
out at any time, thereby creating uncertainties over future state actions
and their impact on the precision of current cost and savings estimates
for these recommendations. Should state authorities decline to relocate
some or all of these units, the costs and savings associated with these
armed forces reserve centers could change. Some of the reserve components'
recommendations have other contingencies as well. For example, the
recommendation for the Texas reserve components calls, in part, for an
Armed Forces Reserve Center to be located in Amarillo, Texas, if the Army
is able to acquire land suitable for the construction of facilities there.
Many others are like this as well. Should the land not be available, these
recommendations will need to be adjusted as well as the related costs and
savings estimates. While the Army's reserve components' recommendations as
a whole are projected to generate more than $1.5 billion in net savings
over a 20-year period if implemented, the uncertainties regarding some of
the actions these recommendations are relying on could result in increases
or decreases to this estimate. The Commission may wish to seek
clarifications as to the status of these statebased actions and the
potential consequences if some of those actions are not executed as
currently planned.

Bundling of Various Most of the Army's recommendations involve the
bundling of multiple Recommendations Lessens closure and realignment
actions under one recommendation, which Visibility of Costs reduces the
visibility of the estimated costs and savings as well as the

payback periods of the individual actions that are embedded within the

Appendix III The Department of the Army Selection Process and
Recommendations

recommendation. While the the Army only produced six recommendations for
the realignment of its active component installations, most of these
recommendations have several components to them. For example, one Army
recommendation involves the realignment of the Armor Center and School
from Fort Knox, Kentucky, to Fort Benning, Georgia; the activation of a
new modular brigade at Fort Knox; the relocation of various combat service
support and other units from Europe and Korea to the United States; and
the relocation of a reserve training center from Fort McCoy, Wisconsin, to
Fort Knox. Similarly, the Army packaged all of its proposed reserve
components' realignments and closures within a state into a single
recommendation for that state. As a result, there may be components within
a recommendation that have relatively high costs or long pay-back periods
(or never produce savings) even though the recommendation taken as a whole
appears to have relatively higher savings or a shorter payback period. The
Commission may therefore wish to request and examine information on the
costs and savings associated with these individual actions. The following
examples highlight these potential issues:

o 	The Army's maneuver training recommendation would realign Fort Knox by
incorporating several elements of scenarios the Army and the Education and
Training Joint Cross-Service Group developed over time. The DOD-approved
recommendation includes the stationing of a new modular brigade at Fort
Knox. However, the Army's original scenario for realigning Fort Knox,
which did not include stationing the modular brigade or realigning the
Armor Center and School, would have generated a 20-year net savings of
almost $225 million. The Education and Training Joint Cross-Service
Group's related scenario involving the relocation of the Armor Center and
School from Fort Knox to Fort Benning would have generated a 20-year net
savings of over $1.3 billion. The Army's approved recommendation combined
most of the elements of these two scenarios but generated 20-year savings
of about $950 million, or about $500 million less than one might have
expected. The difference may be largely attributed to the inclusion of the
new modular brigade in the Army's final recommendation.

o 	The Army's reserve components' transformation recommendation in Arizona
is expected to have a payback period of 5 years and generate a net savings
of almost $52 million over a 20-year period. However, one action contained
within this recommendation involves the creation of an Armed Forces
Reserve Center at the Buckeye Training Site, Arizona. A previous scenario,
which focused solely on this action, indicated that the Army would incur a
net cost of almost $9 million over the 20-year

 Appendix III The Department of the Army Selection Process and Recommendations

period and that it would take more than 100 years to produce savings. By
bundling this action with others, the net costs of this action are
obscured by the net savings of the recommendation's other actions.

Red River Army Depot, Texas

Potential Transformation Opportunity for Depot Maintenance

We are raising several issues with the recommended closure of the Red
River depot and the transfer of its functions to other locations that may
warrant further review by the Commission. The issues relate to the
transfer of the Red River combat vehicle workload to the Anniston Army
Depot, Alabama; the transfer of certain munitions to the McAlester Army
Ammunition Plant, Oklahoma; and the replication of Red River's capability
to remove and replace rubber pads for vehicle track and road wheels.

As discussed in appendix VIII, the Industrial Joint Cross-Service Group,
when developing its maintenance proposals, completed its depot workloading
analysis on the basis of one and a half shifts per workday (60 hour
workweek) rather than the one shift per day (40 hour workweek) under the
current system, thus increasing available capacity and allowing it to
consider depot closures. Industrial group officials told us that use of
more than one shift, which is a common private industrial better business
practice, would enhance transformational opportunities in that it would
provide for more efficient use of facilities and equipment. Industrial
group officials stated that the expanded shift concept, although
transformational, was only a "sizing or planning tool" to examine ways to
increase depot capacity and that it would be left up to each depot to
decide whether or not to employ the expanded shift concept. In other
words, it was a way to see if a depot could accommodate the incoming
transfer of additional workload. We were also told that no policy changes
were envisioned to actually implement the expanded shift concept.
Available information indicates that the closure recommendation may not be
implemented based on the concept of a one and a half shift operation at
the Anniston Army Depot, which is to receive the combat vehicle workload
from Red River. In our visit to Anniston Army Depot, officials told us
that, with additional construction to increase capacity as provided for in
the supporting documentation for the recommendation, they would be able to
accommodate this additional workload without much difficulty and without
working under the expanded shift concept. Industrial group officials
acknowledged that, while some one and a half shift operations may be
implemented at other activities, only a one shift operation was envisioned
at Anniston, given the uncertainty associated with future requirements and
the need to minimize risk by providing for additional capacity if a
contingency arises. As such, it appears that there is essentially

 Appendix III The Department of the Army Selection Process and Recommendations

Uncertainties on Munitions Storage

Transfer of Rubber Production Capabilities

no substantive transformational changes occurring with the closure of the
Red River Army Depot.

The BRAC recommendation to close the Red River Depot also dictates the
transfer of its munitions storage mission to another Army depot--McAlester
Army Ammunition Plant, Oklahoma. However, officials at Red River told us
they were concerned about whether storage capacity at McAlester was
sufficient to handle all of Red River's munitions. Specifically, Red River
officials told us during a recent visit that available excess storage
capacity at McAlester has decreased since BRAC data were gathered, thus
raising concerns whether all of Red River's munitions can be stored there.
Further, Red River officials asserted that McAlester did not have
sufficient storage capacity for special types of munitions without
constructing new storage facilities. According to Red River officials,
certain munitions (category I and II) require different storage capacity
and that McAlester currently does not have enough storage capacity for Red
River's entire category I munitions. However our analysis of the closure
recommendation supporting documentation does not include any provision for
military construction funds. Industrial group officials told us, however,
that it expects that the McAlester plant will demilitarize much of its
ammunition and thus free up space for the munitions stored at Red River.
However, given that some diversion of demilitarization funds for other
purposes has occurred in recent years, it raises questions as to the
extent of the demilitarization that will occur. Nonetheless, in their
opinion, this potential issue is not of concern to them. Time did not
permit us to fully resolve the conflicting information regarding the
extent to which the munitions may be transferred and McAlester's ability
to sufficiently accommodate the storage of any transferred munitions.

Red River officials also raised concerns about the complexities associated
with replicating its rubber production capability, which consists of
removing and replacing rubber pads for vehicle track and road wheels, at
Anniston Army Depot, Alabama, and that it is currently the only source for
road wheels for the Abrams M1 tank. Specifically, Red River officials told
us this capability is not an easy process to reproduce, including
obtaining the required certification associated with the rubber production
capability and that the processes must be qualified through rigorous
testing. The complexities with replicating the rubber production
capability was also echoed by officials at Anniston Army Depot,
Alabama-the installation which is expected to absorb most of Red River's
combat vehicle workload. Officials at Anniston told us they expect a long
certification process in order to perform the required rubber repair
process and that this

Appendix III The Department of the Army Selection Process and
Recommendations

represents the most serious challenge in the workload transfer of Red
River's work. As to the Abrams Ml tanks road wheels, Red River officials
told us that if the capability to produce road wheels is interrupted, the
ability to sustain the warfighter is diminished and overall readiness
could be degraded. To mitigate this risk, officials at Red River told us
that it is imperative that the Army construct a new rubber production
facility at Anniston, establish its processes and qualify its product
before ceasing rubber production at Red River. Industrial group officials
told us that, should a problem arise in this area, that commercial sources
are available to purchase rather than repair these parts. We did not
independently verify their assertion.

The Commission may want to review the extent to which these concerns
associated with Red River are valid and whether they were adequately
considered by DOD.

Appendix IV

The Department of the Navy Selection Process and Recommendations

The Navy followed the common analytical framework established by the
Office of the Secretary of Defense (OSD) for reviewing its functions and
facilities. The Navy's process produced 21 base closure and realignment
recommendations, which cover 63 active and reserve installations. The Navy
projects that its recommendations would realize about $7.7 billion in net
present value savings over a 20-year period. Payback periods-the time
required for savings to offset closure costs-range from immediate to 15
years and average 3.5 years. At the same time, there are limitations
associated with the projected savings related to the lack of planned
reductions in military personnel end-strength associated with the savings.
Some of the Navy's recommendations may warrant additional attention from
the BRAC Commission based on projected force structure changes, decisions
to realign versus close some bases, and extended payback periods. The
Naval Audit Service, which performed audits of the data, concluded that
the data were sufficiently reliable for use during the BRAC process.

Organization and Focus

The Navy established an organization to conduct the closure and
realignment analysis similar to the one it used in the 1995 round. The
Secretary of the Navy established a group of senior military officers and
civilian executives, the Infrastructure Evaluation Group (IEG), chaired by
the Assistant Secretary of the Navy (Installations and Environment) to
conduct the process, and a related team, the Infrastructure Analysis Team,
to support the IEG. The Secretary subsequently established a second
senior-level group, the Department of the Navy Analysis Group, chaired by
the Special Assistant to the Secretary of the Navy for BRAC, that was
subordinate to the IEG, and he directed it to conduct the Navy's analysis
for Navy-unique functions.1 Another associated group, the Functional
Advisory Board, consisted of the Navy and Marine Corps principal members
of the seven joint cross-service groups and was responsible for ensuring
that the Navy leadership was informed of matters relevant to those groups
and for articulating the Navy's position on common business-oriented
support functions for Navy leaders.

The Navy established numerous goals for BRAC, organized around such
considerations as (1) facilitating recruitment and training, (2) providing
quality of life, (3) matching force structure to national defense
strategy,

1 At OSD, the Infrastructure Steering Group (ISG) and the Infrastructure
Executive Council (IEC) provided overall coordination and direction to the
DOD-wide process.

Appendix IV The Department of the Navy Selection Process and
Recommendations

(4) adequately equipping the force, (5) ensuring access to an optimally
integrated logistical and industrial infrastructure, and (6) maintaining
secure and optimally located installations for mission accomplishment
(including homeland defense). With these and other considerations in mind,
the Navy established numerous objectives corresponding to DOD's BRAC
principles, examples include:

o  Optimize access to critical maritime training facilities.

o  Accommodate the 20-year force structure plan.

o  Facilitate active/reserve integration and synchronization.

o  Leverage opportunities for joint basing and training.

o  Enable further installation management regional alignment.

o 	Optimize regional management structure for recruiting districts and
reserve readiness command.

o  Minimize use of long-term leased administrative space.

o 	Provide flexible research, development, test, and evaluation
infrastructure to adapt to Navy transformational mission changes and joint
operations.

o 	Consolidate aircraft basing to minimize sites while maintaining ability
to meet operational requirements.

o 	Rely on private-sector support services where cost-effective and
feasible.

o 	Retain sufficient organic capability to effectively support
maritimeunique operation concepts.

o 	Align Navy infrastructure to efficiently and effectively support Fleet
Response Plan and Sea-basing concepts.

o 	Realign assets to maximize use of capacity in fleet concentration areas
while maintaining fleet dispersal and viable antiterrorism/force
protection capability.

  Appendix IV The Department of the Navy Selection Process and Recommendations

Framework for Analysis

In executing its BRAC process, the Navy sought to eliminate excess
capacity and reconfigure its current infrastructure so that operational
capacity maximized warfighting capability and efficiency. The IEG approved
four major areas for analyses: operations, education and training,
headquarters and support activities, and other activities. These major
areas were then further divided into functions to ensure that
installations performing comparable functions were compared with one
another and to allow identification of total capacity and military value
for an entire category of installations.

The Navy's BRAC process included a review of 889 reporting activities- 765
Navy and 124 Marine Corps-of which 673 were active component and 216
reserve component activities (reserve centers, reserve forces
headquarters, reserve recruiting areas, and reserve personnel centers). As
with previous BRAC rounds, capacity and military value analysis provided
the starting point for the Navy's BRAC process. The Naval Audit Service
served an important role in ensuring the accuracy of data used in these
analyses through extensive audits of data gathered at various locations.

Capacity Analysis	For its capacity analysis, the Navy universe was defined
at the activity or function level, and a capacity data call was
distributed to the 889 reporting activities. Capacity analysis for each
activity consisted of comparing the current Department of the Navy base
structure to the future force structure requirements to determine whether
excess base structure capacity existed within the Department of the Navy.
Current force requirements were based on the existing force structure, and
future force requirements were derived from the 20-year force structure
plan.

All Navy and Marine Corps bases were placed into one of four categories
for capacity analysis: operations, headquarters and support activities,
education and training, and other activities. Each category used a
different metric to analyze capacity. Almost all of the Navy's bases were
contained in the operations function category. In evaluating air
operations activities the Navy used hangar modules,2 while in evaluating
surface/subsurface

2 The hangar module is defined as the hangar space, line space,
administrative space, and maintenance shop space required to house on
aircraft squadron. There are two types of hangar modules used: Type I,
which supports carrier-based fixed wing aircraft and helicopters, and Type
II, which supports larger aircraft.

Appendix IV The Department of the Navy Selection Process and
Recommendations

operations activities it used a cruiser-equivalent concept,3 the same
measures that were used in BRAC 1995.4 In evaluating ground operations
activities, the Navy used a battalion-equivalent concept that considered
the amount of administrative space, covered storage space, and maintenance
space required to support a generic Marine Corps battalion. In evaluating
munitions storage and distribution, the Navy used throughput (loading and
unloading) and short-term storage functions to conduct its analysis. The
Navy identified excess capacity in all four categories, as shown in table
11.

Table 11: Excess Capacity Identified by the Navy, by Function

Percentage of Function excess capacity

Aviation

Surface/subsurface

Ground

o  Administrative 0

o  Storage 12

o  Maintenance 11

Munitions storage and distribution (naval weapons stations)

Source: Department of the Navy.

In completing its capacity analysis, the Navy assumed that it would be
necessary to home base all aircraft and ships at the same time. The Navy
did not include additional infrastructure requirements to accommodate
surge capability. According to Navy BRAC officials, the force structure-
number of ships and aircraft-is finite in number, and additional ships or
aircraft could not be quickly produced in the event of a contingency. The
officials stated that their analysis also ensured that sufficient
flexibility was

3 That concept is a single metric that considered berthing capacity for
all Navy surface ships normalized to the Cruiser class of ship. They must
have cold-iron, homeport capability and must meet shore power quality and
quantity requirements, water and sewage requirements, and channel depth
and height restrictions. For example, an aircraft carrier equals four
cruiser equivalents.

4 The capacity analysis for surface/subsurface activities considered all
naval activities that reported cruiser-equivalent berthing capability
except for the Naval District of Washington, Naval Support Activity New
Orleans, and the Nuclear Power Training Unit, Charleston. These activities
were excluded because they have limited capability and viability to
homeport naval vessels.

  Appendix IV The Department of the Navy Selection Process and Recommendations

retained to handle surge represented by operational tempo changes or
unanticipated operational requirements. For example, for
surface/subsurface operations, the Navy concluded that there was
sufficient berthing space available in nonoperational bases (shipyards and
weapon stations) to meet surge or other unanticipated operational
requirements.

Navy officials projected that their closure recommendations, if approved,
would reduce excess capacity in aviation operations from 19 percent to 16
percent, in surface/subsurface operations from 25 percent to 17 percent,
and in munitions storage and distribution5 operations from 24 percent to
16 percent, but they would not reduce excess ground operations capacity.
The Navy did not recommend closing any ground operations facilities,
citing cost considerations and noting that planned force structure changes
would further increase its requirements.

Military Value Analysis	In completing its military value analysis, the
Navy targeted military value questions to specific activities in order to
rank installations in the four operational subgroups from highest to
lowest in military value. Each of the four operational subgroups had
overarching concepts by which military value scoring plans were then
developed to measure and rank each installation. Military values were
assigned to 35 Navy and Marine Corps installations under air operations,
29 surface/subsurface installations, and 11 ground operations
installations. Table 12 shows how the Navy weighted military value
criteria in its analyses of operational functions.

5 The analysis showed no excess capacity for munitions throughput and
showed excess capacity for storage.

Appendix IV The Department of the Navy Selection Process and
Recommendations

                 Table 12: Navy Military Value Criteria Weights

                             Figures in percentages

                            Military value criteria

1. The current and future mission capabilities and the impact on
operational readiness of the total force of the Department of Defense,
including the impact on joint warfighting, training, and readiness.

2. The availability and condition of land, facilities, and associated
airspace (including training areas suitable for maneuver by ground, naval,
or air forces throughout a diversity of climate and terrain areas and
staging areas for the use of the Armed Forces in homeland defense
missions) at both existing and potential receiving locations.

3. The ability to accommodate contingency, mobilization, surge, and future
total force requirements at both existing and potential receiving
locations to support operations and training.

4. The cost of operations and the manpower implications.

                                   Total 100

Source: DOD and Department of the Navy.

Note: The system of weights provided a basis for assigning relative values
to data collected and tabulated across each military value dimension.

Key factors considered in evaluating the military value of aviation
operations activities included size and versatility of the facilities,
proximity to training opportunities, and the strategic location of
airfields. In considering surface/subsurface activities, key factors were
the size and versatility of ship berthing, maintenance and support
capabilities, and proximity to naval shipyards. Additional value was given
for strategic nuclear submarine homeport capability and Nimitz-class
nuclear powered berthing capability. Also considered was the proximity to
training facilities, ranges, and operations areas as well as strategic
location. Likewise, in considering ground operations activities, key
factors were facilities and services, operational staff buildings,
ordnance storage depots, and organic maintenance shops. Additional value
was given for capability to receive and stage onward movement and
integration of forces. Also considered was proximity to ranges, maneuver
areas and training areas as well as proximity to aerial and seaports of
debarkation. Key factors in the munitions storage and distribution
operations activities were storage capability, throughput capability,
strategic factors, environment and encroachment, and personnel support.
Figure 10 illustrates how the Navy linked its analysis to the military
value criteria for the naval aviation function.

  Appendix IV The Department of the Navy Selection Process and Recommendations

Figure 10: Selected Attributes, Metrics, and Data Questions Used to Assess
                  Military Value of Naval Aviation Operations

                       Source: GAO analysis of Navy data.

aThe BRAC military value criteria are the first four BRAC selection
criteria.

bMilitary value attributes are characteristics of each criterion. The Navy
used a total of five military value attributes.

cMilitary value metrics are measures for the attributes. The Navy used a
total of 31 military value metrics.

dThe Navy used a total of 73 data call questions.

The same process was used to analyze military value with the other
operational and functional areas.

Naval Audit Service's Role The Naval Audit Service played an important
role in ensuring that the data

in the Process 	used in the Navy's analyses were certified. Through
extensive audits of the capacity, military value, and scenario data
collected from field activities,

  Appendix IV The Department of the Navy Selection Process and Recommendations

the audit service notified the Navy of any data discrepancies for the
purpose of follow-on corrective action.6 While the process of validating
data was quite lengthy and challenging, the Naval Audit Service deemed the
Navy data was sufficiently reliable for use in the BRAC process.

Identification and Assessment of Alternative Scenarios and Selection of
Recommendations

The Navy used results from the capacity and military value analyses as the
inputs to its optimization model to help identify initial scenarios for
realignment and closure.7 In some circumstances, such as closure of naval
reserve centers, military judgment and transformation provided the basis
for scenarios and later decisions. For example, Navy officials said it was
necessary to retain naval reserve centers for naval air reservists near
major airline hubs and activities in order to retain the demographic
profile necessary to recruit and retain personnel for these units. The
Navy identified 187 scenarios for consideration; 82 involved Navy and
Marine Corps reserve centers. The scenarios were then further assessed
through more detailed scenario analyses, cost and savings considerations,
risk assessments, and the Navy's IEG deliberations, which resulted in 53
candidate recommendations being forwarded to DOD's IEC. After some
consolidation and bundling, DOD approved 21 Department of the Navy
recommendations and forwarded them to the BRAC Commission.

The Navy eliminated scenarios for strategic reasons, to maintain
operational flexibility, and for cost considerations. For example, various
scenarios proposing to close Submarine Base San Diego, California, were
dropped because a closure would have eliminated the sole capability for
berthing attack submarines on the West Coast. Likewise, scenarios
proposing to close Naval Station Everett, Washington, were dropped because
of the strategic importance of this seaport. Various proposals to close
active naval air stations were dropped because of operational

6 The Naval Audit Service visited 214 sites, covering 45 data calls, and
audited 8,338 questions.

7 A model developed by the Center for Naval Analysis, which was used in
BRAC 1995 and updated for BRAC 2005. The model met operational
requirements and policy considerations by incorporating "rules" or
"constraints" for functions so that the model would not select an
operationally infeasible solution. For example, if the East Coast naval
bases had enough berthing capacity to handle all of the ships in the force
structure plan, the model could place all the ships at those bases and
suggest closure of all of the West Coast and Pacific bases, which would be
unacceptable. Therefore, the surface/subsurface operations portion of the
model included a constraint that at least 40 percent of the
surface/subsurface ship be located on each coast.

Appendix IV The Department of the Navy Selection Process and
Recommendations

concerns. For example, the Navy analyzed the potential to close Marine
Corps Air Station Beaufort, South Carolina, and relocate its squadrons to
Marine Corps Air Station Cherry Point, North Carolina. However, the Navy
leadership concluded that Marine Corps Air Station Beaufort should be
retained for future tactical aviation basing flexibility, especially in
light of concerns about the continued viability of basing aviation units
at Naval Air Station Oceana, Virginia. Due to increasing environmental and
encroachment issues surrounding Naval Air Station Oceana, the Navy also
analyzed various scenarios to close it. However, the analyses indicated a
long payback period for achieving return on investment, high one-time
costs, and operational issues at receiving sites. Therefore, the Navy
determined that the closure of Naval Air Station Oceana was not feasible.
Another complicating factor for basing of East Coast tactical aircraft is
the Navy's attempt to purchase approximately 33,000 acres in eastern North
Carolina to build a new outlying landing field to provide simulated
aircraft carrier landings for aircraft stationed at Naval Air Station
Oceana and Marine Corps Air Station Cherry Point. The purchase is
currently being challenged in federal court over environmental concerns.

The Navy also did not pursue some scenarios because of cost considerations
and extended payback periods. For example, Navy data showed a one-time
cost of $838 million to close Construction Battalion Center Gulfport,
Mississippi, and relocate it to Camp Lejeune, North Carolina, and a
one-time cost of $643 million to close Marine Corps Recruit Depot San
Diego, California, and relocate all recruit training to Parris Island,
South Carolina. The Navy leadership determined that these costs did not
justify closing either the Construction Battalion Center Gulfport or the
Marine Corps Recruit Depot San Diego.

The Navy also considered alternatives to homeport an additional carrier
strike group forward in the Pacific theater through the BRAC process to
accommodate Integrated Global Presence and Basing Strategy decisions. The
Navy analyzed moving a carrier to Pearl Harbor, Hawaii, and Guam, and
found that other than cost, there was no clear BRAC preference for either
the losing or the gaining base.8 The Navy leadership postponed any
decision until the ongoing Quadrennial Defense Review is completed.

8 Costs associated with moving a carrier strike group to Pearl Harbor,
Hawaii, were projected to be from $2.6 to $3.1 billion. Cost for moving it
to Guam were projected to be from $4 billion to $6.6 billion.

  Appendix IV The Department of the Navy Selection Process and Recommendations

The Navy worked closely with the joint cross-service groups as they
developed recommendations that affected Navy installations. In some cases,
a joint cross-service group recommendation or series of recommendations
relocated a majority of the functions, workload, equipment, or personnel
from a Department of the Navy installation, thereby enabling closure of
the entire installation. Where the DAG determined that the aggregate of
joint cross-service group actions were of such magnitude that it affected
the "critical mass" of the installation, e.g., impact on the major
mission, a substantial number of personnel, and/or a substantial amount of
acreage, a Navy closure scenario was developed. The closure of Portsmouth
Naval Shipyard, Maine is an example of such a closure. The ISG and IEC
approved an industrial joint cross-service group recommendation to
relocate the ship overhaul and repair function at Portsmouth Naval
Shipyard to Norfolk Naval Shipyard, Puget Sound Naval Shipyard, and Pearl
Harbor Naval Shipyard, and to relocate the Submarine Maintenance
Engineering, Planning and Procurement Activity at Portsmouth Naval
Shipyard to the Norfolk Naval Shipyard. This recommendation eliminated
Portsmouth Naval Shipyard's primary mission and moved or eliminated
approximately 90 percent of its workforce. After conducting criteria 5-8
analyses, the Navy recommended closing Portsmouth Naval Shipyard in its
entirety.

Recommendations 	The Navy projects that its 21 recommendations will
produce about $754 million in net annual recurring savings and, after
savings have offset

Approved by DOD	implementation costs, a 20-year net present value savings
of $7.7 billion. Table 13 provides a summary of the financial aspects of
the Navy's recommendations.

Appendix IV The Department of the Navy Selection Process and
Recommendations

           Table 13: Financial Aspects of the Navy's Recommendations

                 Fiscal year 2005 constant dollars in millions

                                                       Net           
                                                    annual           
                   DOD   One-time Net                                 20-year 
                 report           implementation recurring   Payback      net 
    Recommended   page    (costs) (costs) or      savings     period  present 
      actions                     savingsa                             valueb 
       Close                                                                  
     Submarine   DON-10                             $192.8           
     Base New                                                        
      London,            ($679.6)       ($345.4)             3 years $1,576.4
        CT                                                           
    Close Naval                                                               
     Shipyard    DON-23                     21.4     128.6           
    Portsmouth,           (448.4)                            4 years  1,262.4
    Kittery, ME                                                      
    Close Naval                                                               
    Air Station  DON-13    (43.0)          289.9      66.1 immediate    910.9
    Atlanta, GA                                                      
     Close and                                                                
realign Naval DON-26                    100.0      75.6              822.2
      Station             (178.4)                            2 years 
Ingleside, TX                                                     
and Naval Air                                                     
      Station                                                        
      Corpus                                                         
    Christi, TX                                                      
respectively                                                      

      Close and realign Naval Air     DON-21 (126.3) 134.7 60.6 2 years 710.5 
                Station                                                 
      Willow Grove, PA and Cambria                                      
    Regional Airport, Johnstown, PA                                     
              respectively                                              

        Close Naval Station       DON-20 (17.9)    220.0 47.4 immediate 665.7 
           Pascagoula, MS                                               
    Close Naval Support Activity  DON-15                 36.5           276.4 
                New                      (164.6)  (86.1)       3 years  
            Orleans, LA                                                 
     Realign Naval Air Station    DON-18                 34.9           238.8 
             Brunswick,                  (147.2) (112.6)       4 years  
                 ME                                                     
     Close Navy Reserve Centers   DON-37  (3.2)     87.1 16.1 immediate 236.6 
Realign Marine Corps Logistics DON-6             56.5 18.4 immediate 230.6 
                Base                     (26.0)                         
            Barstow, CA                                                 
       Close Navy Recruiting      DON-34            78.3 14.5 immediate 214.5 
             Districts                    (2.4)                         
    Indianapolis, IN; Omaha, NE;                                        
              Buffalo,                                                  
     NY; Montgomery, AL; Kansas                                         
              City, MO                                                  
    Close Naval Weapons Station,  DON-9             43.2 16.4           199.7 
                Seal                     (14.0)                1 year   
         Beach, Concord, CA                                             
Realign Navy Reserve Readiness DON-44  (2.6)     30.9  6.5 immediate 
              Commands                                                  
       Close Naval Facilities     DON-28                  9.3           
         Engineering Field               (37.9)    (9.1)       4 years  
         Division/Activity                                              
    Close Navy and Marine Corps   DON-29            17.0  9.9            76.8 
              Reserve                    (62.4)                7 years  
              Centers                                         (average) 
     Close Marine Corps Support   DON-19                  5.8            49.8 
              Activity                   (23.3)    (8.0)       3 years  
          Kansas City, MO                                               
         Close Navy Regions       DON-35  (3.2)      8.9  2.7  1 year    34.6 
Close Navy Supply Corps School DON-14 (23.8)   (13.6)  3.5  7 years   21.8 

Athens, GA

  Appendix IV The Department of the Navy Selection Process and Recommendations

(Continued From Previous Page)

                 Fiscal year 2005 constant dollars in millions

One-time (costs)

Net implementation (costs) or savingsa

                                                 Net annual recurring savings

Payback period

20-year net present valueb DOD report page

Recommended actions

Realign Officer Training Command, Naval Air Station Pensacola, FL

                            DON-12   (3.6)       1.4    0.9 4 years  
    Realign Naval Station   DON-25                      1.0          
         Newport, RI                 (11.8)    (8.3)        13 years 
     Close Naval Support    DON-7                       6.0          
       Activity Corona,              (80.2)   (65.5)        15 years 
              CA                                                     
            Total                  ($2,099.8) $440.7 $753.5 3.5 avg. $7,713.7 

Source: GAO analysis of DOD data.

aThis represents net costs or savings within the 6-year implementation
period required to implement BRAC recommendations.

bDOD used a 2.8 percent discount rate to calculate net present value.

The Navy's recommendations include 16 closures and 5 realignment actions,
affecting 63 installations. Much of the projected annual recurring savings
are based on military and civilian personnel reductions. The Navy has two
recommendations with payback periods greater than 10 years-the realignment
of Naval Station Newport, Rhode Island, and the closure of the Naval
Support Activity Corona, California.

Issues Identified with Approved Recommendations

Time did not permit us to assess the operational impact of each
recommendation, particularly individual recommendations that include
multiple closure and realignment actions at multiple locations outside of
a single geographic area. Nonetheless, we offer a number of broad-based
observations about the proposed recommendations. These recommendations may
warrant additional attention from the BRAC Commission based on issues
associated with projected savings from military personnel reductions,
force structure changes, decisions to realign versus close some bases,
extended payback periods, and potential impact on the U.S. Coast Guard.

There remains uncertainty as to what the Navy's future force structure
will actually look like, particularly with battle force ships. While the
Navy's force structure plan that accompanies its BRAC report gives a range
of 341 to 370 ships in the fleet in 2024, the Navy's 30-year shipbuilding
plan identifies a possible lower limit of 314 ships in 2024 (including all
type surface ships and submarines). Additionally, the shipbuilding plan
provides a fleet profile in the decade afterward (to the year 2035) with
as few as 260

  Appendix IV The Department of the Navy Selection Process and Recommendations

to 325 ships. This includes a decrease in aircraft carriers from the
current 12 to 10 in 2035, as projected in the Navy's shipbuilding plan.

Military Personnel Reductions

Our analysis showed that about $386 million, or about 51 percent, of the
projected $753.5 million in net annual recurring savings are based on
savings from eliminating almost 4,000 active duty military personnel
positions. A Navy official indicated that these reductions will help the
Navy achieve the projected 21,000 active military personnel reductions
already programmed between fiscal year 2006 and 2011. However, the Navy
has already reduced the military personnel account to reflect the savings
associated with the projected 21,000 end-strength reduction. While the
projected almost 4,000 reductions associated with BRAC actions might help
the Navy achieve their overall programmed end strength reductions, it will
not generate any additional dollar savings that could be reallocated for
other higher priority needs.

Projected Changes in Navy While the recommendations to close Submarine
Base New London,

Force Structure	Connecticut, and Portsmouth Naval Shipyard, Maine, project
significant savings, both are based on projected decreases in the number
of submarines in the future force structure. However, as mentioned
earlier, there is uncertainty over the number of submarines and surface
ships required for the future force.

Submarine Base New London	The proposed closure of Submarine Base New
London is based on reducing existing excess capacity in the
surface/subsurface category and planned reductions in the submarine force.
Both the 25 percent excess capacity identified in the surface/subsurface
infrastructure and the projected 21 percent reduction in the submarine
force led the Navy to analyze various proposals to close submarine bases.
As previously noted, the Navy's BRAC scenario analysis focused on East
Coast submarine bases because attack submarines are single-sited on the
West Coast. The Navy considered three alternatives: (1) moving all
submarines at Naval Station Norfolk, Virginia, to New London, Connecticut;
(2) moving all submarines at Submarine Base New London and the Submarine
School New London to Naval Station Norfolk; and (3) moving submarines at
Submarine Base New London to both Naval Station Norfolk and Submarine Base
Kings Bay, Georgia, and moving the submarine school to Kings Bay or Naval
Station Newport, Rhode Island. The Navy analysis showed that only the
option to relocate submarines from New London to Norfolk and Kings Bay
achieved a

  Appendix IV The Department of the Navy Selection Process and Recommendations

reduction in capacity and savings resulting from a base closure. Navy
officials noted that Submarine Base New London had a lower military value
than both Norfolk and Kings Bay. As we also discuss in appendix XIV, this
recommendation has the largest economic impact on any community in terms
of the number of job losses (8,457 direct jobs and 7,351 indirect jobs).
These direct and indirect job losses would result in a negative change of
9.4 percent in unemployment for the economic area around Submarine Base
New London.

The majority of the projected savings would result from the elimination of
about 80 percent of the civilian personnel positions at New London.
Officials at New London we met with concurred with the projected number of
civilian positions that could be eliminated based on coordination with
both receiving locations-Kings Bay, Georgia, and Norfolk, Virginia, and on
the number of personnel that would be needed to support the missions being
relocated. However, a separate issue of concern relates to the proposed
move of the Navy's submarine school from New London to Kings Bay. In our
discussions with officials at New London, we found while the Navy's BRAC
cost and savings analysis includes one-time costs to move the specialized
equipment associated with the submarine school, the Navy analysis does not
appear to have included an assessment of the time it would take to pack,
move, and unpack the equipment, and the potential impact on the training
pipeline and the certification of crews for submarines. In subsequent
discussions with Navy headquarters officials, we were told that the
submarine school would be the last activity to move from New London to
ensure that facilities at Kings Bay are ready to start training.
Furthermore, they noted that the implementation plan will ensure that the
Navy will be able to perform crew certification and maintain the training
pipeline. The BRAC Commission may want to assure itself that the Navy has
developed a transition plan to satisfy the training and certification
requirements until the receiving sites are able to perform this training,
without unduly interrupting the training pipeline.

Portsmouth Naval Shipyard	The proposed closure of the Portsmouth Naval
Shipyard assumes that the remaining three shipyards9 could perform all of
the projected depot level maintenance workload based on planned reductions
in the number of attack submarines and the Navy's proposal to decommission
an aircraft

9 The other shipyards that perform depot level ship refueling,
modernization overhaul, and repair work are Norfolk, Pearl Harbor, and
Puget Sound.

Appendix IV The Department of the Navy Selection Process and
Recommendations

carrier.10 The Navy, with agreement from the Industrial Joint
Cross-Service group, which initially had assessed depot functions,
selected the Portsmouth Naval Shipyard for closure, despite Pearl Harbor
Shipyard's having a slightly lower military value score, because it
determined that Portsmouth was the only closure that would both eliminate
excess capacity and satisfy the Combatant Commander's and Navy's strategic
objective to place ship maintenance capabilities close to the fleet.

The Navy BRAC and Industrial Joint Cross-Service Groups analyzed scenarios
closing each of the four shipyards, and determined that only the potential
closure of Portsmouth or Pearl Harbor was feasible due to cost and
capacity considerations. Initially, based on capacity data and the 20year
force structure plan submitted in March 2004, the Industrial Joint
Cross-Service Group determined that there was sufficient excess capacity
in the aggregate across the four shipyards to close either Pearl Harbor or
Portsmouth. However, the group determined that there was insufficient
excess capacity in certain commodities11 in the remaining three shipyards
to accept all the workload from the closing shipyard. As such, the group
initially determined that no shipyard should be closed. However, based on
changes in the DOD's 20-year force structure plan it submitted to Congress
in March 2005-reductions in the number of submarines and the
decommissioning of an aircraft carrier-the industrial group's analysis
indicated that workload for all commodities at Portsmouth or Pearl Harbor
could be accommodated by the remaining three shipyards. A Naval Sea
Systems Command analysis of dry dock availability indicates that the three
remaining Navy shipyards could handle the projected ship repair and
overhauls in the future. However, the analysis indicates that within the
next three years there would not be much, if any, room for unanticipated
ship repairs. According to Navy officials, any unanticipated requirements
would be addressed by a combination of delaying and re-prioritizing
scheduled overhaul work, and authorizing additional overtime, which they
noted is no different than how they manage these requirements in the
current operating environment.

10 Legislation is currently pending in Congress that would not allow the
Navy to decommission the U.S.S. John F. Kennedy. See H.R. 1815, 109th
Congress, section 127 (2005).

11 A commodity is a generic grouping of the types of depot and maintenance
work associated with end items, weapons systems, or major processes, for
example, cranes and rigging, electronics, forge, nuclear testing, or
welding.

Appendix IV The Department of the Navy Selection Process and
Recommendations

In selecting Portsmouth over Pearl Harbor for closure, the Navy noted that
Pearl Harbor is in a fleet concentration area in the Pacific theater and
is the homeport for many ships, while Portsmouth is not in a fleet
concentration area or a homeport for any ships. In addition, closing Pearl
Harbor would require the ships that are homeported there to transit back
to the east coast, in some cases, for maintenance, which the Navy would
essentially view as a deployment and, for quality of life reasons, would
want to avoid if possible. Another strategic objective was to maintain dry
docks for aircraft carriers on both coasts and in the central Pacific.
Pearl Harbor has aircraft carrier dry-docking capability, but Portsmouth
does not.

In our meeting with employees at the Portsmouth Naval Shipyard in June
2005, they raised questions about several issues regarding the cost and
savings analysis developed to support the proposed action. First, they
objected to the industrial group and the Navy disallowing about $281
million in costs ($205 million one-time and $76 million recurring) that
they believed would be incurred if the shipyard were to close. About $52
million of the recurring costs are associated with sustainment of
facilities and power plant from fiscal year 2008, when the base is
projected to close, until 2011. While some of these costs are likely
valid, overall they appear high in relation to the Navy's projected
savings of about $120 million over the same period from reduced base
operating support and sustainment of facilities. The majority of the
one-time costs are associated with closure of the buildings, historical
preservation of buildings, and write-off of undepreciated assets of the
working capital fund. While it is questionable whether all of these costs
should be included, our analysis shows that if they are all included, the
projected 20-year savings would decrease by $192 million, or 15 percent.

Portsmouth employees were also concerned that the cost and savings
analysis did not adequately capture the widely recognized efficiencies of
their shipyard, which, if adopted, could translate into additional costs
that the Navy would incur by shifting its workload to the remaining three
Navy shipyards. The employees estimated that they perform submarine
overhaul and depot maintenance work at about $54 million per year less
than the average of the other three shipyards, an efficiency which was not
included in the Navy's analysis. Department of Navy officials recognized
that the Portsmouth Naval shipyard is presently more efficient than the
Puget Sound and Pearl Harbor shipyards, but noted that it is very
difficult to quantify the impact of this efficiency. Navy officials noted
that the scope of work performed is not always the same, depending on the
condition of each submarine, and wages, especially in Pearl Harbor, are
higher than in

  Appendix IV The Department of the Navy Selection Process and Recommendations

Portsmouth. Navy officials told us they were reviewing the efficiency
analysis developed by the Portsmouth Naval Shipyard; however, their
analysis was not completed in time to be included in this report. The
Commission may wish to consider the views of the shipyard employees and
the results of the Navy's review in their analysis of this recommendation.

Decisions to Realign Rather The Navy initially recommended the closure of
Naval Air Station

Than Close Some Bases	Brunswick, Maine, and Marine Corps Logistics Base
Barstow, California. However, based on direction from the IEC, these
closure recommendations were changed to realignments. As a result, the
20-year savings decreased by almost $2 billion, as shown in table 14.

Table 14: Comparison of Alternatives to Closing and Realigning Naval Air
Station Brunswick and Marine Corps Logistics Base Barstow

Dollars in millions

                               Brunswick Barstow

                 Closure Realignment Difference  Closure Realignment Difference 
    One-time    ($192.9)    ($147.2)  ($45.7)   ($316.6)     ($26.0)   ($290.6) 
    (costs)                                                          
      Net          $73.4                                                        
 implementation             ($112.6)  ($39.2)   ($248.3)     ($56.5)   ($191.8)
(costs) or                                                        
    savings                                                          
Net annual      $92.7       $34.9   $57.8      $141.9       $18.4     $123.5 
recurring                                                         
    savings                                                          
 Payback period   1 year     4 years              1 year  immediate  
  20-year net     $840.7      $238.8   $601.9   $1,600.0      $230.6   $1,369.4 
 present value                                                       
    savings                                                          

Source: GAO analysis of Navy data.

According to Navy BRAC officials, the senior Navy leadership was reluctant
to give up the Navy's remaining air station in the Northeast but found the
potential savings significant enough to recommend closure of Brunswick.
However, the judgment of the IEC changed the closure to a realignment to
retain access to the strategic airfield in the Northeast. As a result, the
base will become a naval air facility with an operational runway, but all
aircraft and associated personnel, equipment, and support will be
relocated to Naval Air Station Jacksonville, Florida, and the Aviation
Intermediate Maintenance will be consolidated with Fleet Readiness Center
Southeast Jacksonville, Florida. The Navy is maintaining its cold
weather-oriented Survival, Evasion, Resistance, and Escape School, a Navy
Reserve Center, and other small units at Brunswick. Navy officials

  Appendix IV The Department of the Navy Selection Process and Recommendations

also stated that Brunswick would provide a base from which to carry out
potential homeland defense missions should those missions not be able to
be carried out from other military or civilian airfields in the Northeast.

The Industrial Joint Cross-Service Group had proposed to close the depot
maintenance functions at Barstow because of its low military value and to
increase opportunities for joint maintenance at Army depots doing similar
work. However, the Marine Corps objected to the closure because that would
eliminate its only West Coast ground vehicle depot maintenance presence
and would increase repair cycle times for the Marine's West Coast
equipment by increasing rail transit and customer turnaround time by 10 to
30 days. In response to the Marine Corps' concerns, the IEC directed the
Industrial Joint Cross-Service Group to develop several alternative
recommendations that would have closed Barstow but still realigned its
workload to other West Coast activities. The Industrial Joint Cross
-Service Group estimated that all of these options would result in higher
net annual recurring and 20-year net present savings than would the
realignment option. The Commission may want to assess DOD's rationale for
changing the recommendation from a closure to realignment in light of the
projected reductions in savings.

Extended Payback Periods	The Navy has two recommendations for which the
payback period is greater than 10 years, much longer than typically
associated with recommendations in the 1995 BRAC round, and the one-time
costs are significantly greater than the projected 20-year savings by
which BRAC rounds are typically measured. The Navy's proposal to realign
Naval Station Newport by relocating the Navy Warfare Development Command
to Naval Station Norfolk has a 13-year payback period and a projected
onetime cost of about $12 million, primarily to rehabilitate existing
structures and move 111 personnel. According to Navy officials, this
recommendation places the Navy Warfare Development Command closer to Fleet
Forces Command and the Second Fleet Battle Lab it supports. Likewise, the
Navy recommendation to close Naval Support Activity Corona has a payback
period of 15 years, one-time cost of about $80 million, and 20-year
savings of about $400,000. Navy data shows that the one-time cost is
primarily to rehabilitate existing facilities and relocate personnel from
Corona to Naval Air Station Point Mugu, California. Navy officials stated
the closure had merit because the Corona facility was a single-function
facility whose mission could be performed at other multifunction bases.

  Appendix IV The Department of the Navy Selection Process and Recommendations

Potential Impact on the U.S. Coast Guard

Several Navy recommendations to close bases could affect the U.S. Coast
Guard. However, the Navy's cost and savings analysis did not consider any
costs that could be incurred by the Coast Guard if the bases are closed.
Navy officials recognized that the Coast Guard would be affected by
several of its recommendations and considered the impact in its
deliberations. However, they determined that it was unreasonable to
include any cost estimates for the Coast Guard because the Navy could not
assume the final disposition of the facility and how much, if any, of the
facility the Coast Guard would opt to retain. Coast Guard officials stated
that the Navy briefed them on their potential recommendations several
months prior to the public announcement of the recommendations. The Coast
Guard is in the process of developing potential basing alternatives, to
include cost impacts, for each affected location. However, the Coast Guard
had not completed these estimates in time for us to include them in our
report.

Appendix V

The Department of the Air Force Selection Process and Recommendations

The Air Force followed the common analytical framework established by the
Office of the Secretary of Defense (OSD) for reviewing its functions and
facilities. The Air Force's process produced 42 recommendations. Most of
the recommendations are devoted to reserve component bases, including
several realignment actions reallocating aviation assets to multiple
locations. In comparison with the other services, its recommendations
contain the smallest number of closures (three) of active component bases.
It had two major realignments, however, that left the bases in a reduced
active duty status, and another where the base was transferred to the
Army, with the Air Force retaining a limited presence as a tenant. The Air
Force recommendations project the greatest savings of any of the services-
$14.6 billion in 20-year net present value savings. Payback periods-the
time required for savings to offset closure and realignment costs-for
active component bases range from immediate to 14 years, and average 3
years, and for reserve component bases they range from immediate to 18
years, and average 6 years. However, our analysis indicates that these
projected savings in each of their categories could have some limitations,
primarily due to the lack of personnel end-strength reductions associated
with claimed savings. In addition, some Air Force recommendations may
warrant additional attention by the BRAC Commission because of uncertainty
regarding future mission requirements for adversely affected reserve
component personnel, and because of lengthy payback periods associated
with some recommendations having been merged with other recommendations
that have shorter payback periods, thus making the former appear more
acceptable. The Air Force Audit Agency, which performed audits of the
data, concluded that the data were sufficiently reliable for use during
the BRAC process.

Organization and Focus

The Secretary of the Air Force established a group of senior Air Force
military and civilian personnel to form an executive deliberative body
responsible for conducting the Air Force base closure and realignment
analyses. The Base Closure Executive Group was led by a Deputy Assistant
Secretary and a General Officer from Plans and Programs, who served as
co-chairs. This group's working-level staff made up the Base Closure
Working Group, which provided direct support for data collection,
validation, and analysis in the development of base closure and
realignment recommendations.1

1 At OSD, the Infrastructure Steering Group (ISG) and the Infrastructure
Executive Council (IEC) provided overall coordination and direction to the
DOD-wide process.

Appendix V
The Department of the Air Force Selection
Process and Recommendations

The Air Force 2005 BRAC goals were to transform by maximizing warfighting
capability of each squadron and realigning infrastructure with future
defense strategy, maximizing operational capability by eliminating excess
physical capacity, and to capitalize on opportunities for joint activity.
To guide the BRAC process, the Air Force developed the following
principles, to be applied to both active and reserve components:

o 	Maintain squadrons within operationally efficient proximity to
DODcontrolled airspace, ranges, military operations areas, and low-level
routes.

o 	Optimize the size of Air Force squadrons in terms of aircraft models,
aircraft assigned, and crew ratios applied.

o 	Retain enough domestic capacity to base the Air Force entirely within
the United States and its territories.

o  Retain aerial refueling bases in optimal proximity to their missions.

o 	Better meet the needs of the Air Force by maintaining or placing Air
Reserve Component (Air National Guard or Air Force Reserve Command) units
in locations that best meet the demographic and mission requirements
unique to the Air Reserve Component.

o 	Ensure joint basing realignment actions (in comparison with the status
quo) either increased the military value of a function or decreased the
cost for the same military value of that function.

o 	Ensure that long-range strike bases provide flexible strategic response
and strategic force protection.

o 	Support the Air Expeditionary Forces framework by keeping two
geographically separate munitions sites.

o 	Retain enough surge capacity to support deployments, evacuations, and
base repairs.

o 	Consolidate or co-locate legacy fleets (such as A-10, B-1, B-52, F-15,
and F-16 aircraft).

o 	Ensure global mobility by retaining two air mobility bases and one
additional wide-body-capable base on each coast.

                                   Appendix V
                   The Department of the Air Force Selection
                          Process and Recommendations

Several of the above principles were included in an Expeditionary Air
Force Principles White Paper,2 which outlined principles to shape future
force development and basing. This document, discussed the increased
effectiveness and efficiency of consolidating smaller squadrons into
larger units. The significant reduction in aircraft based on the future
force structure plan of 2025 will reduce the Air Force infrastructure,
including that of the Air Reserve and the Air National Guard to select the
best combination of bases, while accomadating use of reserve components
for emerging missions, such as homeland defense and unmanned aerial
systems.

Framework for Analysis

The Air Force BRAC process included a review of 154 installations-70
active and 84 reserve. As with previous BRAC rounds, capacity and military
value analyses provided the starting point for analysis. However, in this
BRAC round the Air Force concentrated its analysis on operational aircraft
and space missions, since joint cross-service groups developed capacity
and military value analyses and recommendations for various commonly held
business-oriented categories, such as education and training,
headquarters, and technical functions. The Air Force Audit Agency
performed an important role in ensuring the accuracy of data used in these
analyses through extensive audits of data gathered at various locations.

Capacity Analysis	The Air Force collected information on key capacity
areas, such as physical capacity (buildings and utilities), environmental
issues (air emissions and water resources), encroachment (constraints and
noise safety), airfields, airspace and ranges (operational capacity of
runways, ramp space, and fuel storage), communications
(telecommunications), and personnel. The capacity data call was designed
to provide information to assess bases for current and future missions in
the following mission areas: (1) airlift; (2) space operations; (3)
bombers; (4) tankers; (5) command and control and intelligence,
surveillance and reconnaissance; (6) unmanned aerial vehicles; (7) fighter
aircraft; and (8) Special Operation Forces and Combat, Search, and Rescue.
The Air Force also considered surge requirements in its capacity analysis.
According to Air Force officials, surge was defined as the ability to
domestically "bed down" all aircraft, including those currently

2 Department of the United States Air Force, Expeditionary Air Force
Principles White Paper (Washington, D.C.: July 14, 2004).

Appendix V
The Department of the Air Force Selection
Process and Recommendations

stationed overseas, as well as the ability to respond to natural
disasters, emergencies, and runway repairs.3

Following the collection of the capacity data call, the Air Force
requested that its eight major commands4 and the Air National Guard
estimate each installation's capacity to acquire additional squadrons,
taking into consideration existing conditions, facilities, additional
construction requirements, and operational and environmental
infrastructure.

The capacity analysis incorporated information from the 20-year force
structure plan to serve as a baseline and to further define requirements
in the future. Although this analysis indicated the ability of bases to
bed down additional aircraft, according to Air Force officials, it did not
provide a specific excess capacity percentage by installation or major
command. Accordingly, an overall capacity analysis report was not made
available to us, comparable to that provided by the other military
departments. However Air Force officials said they considered capacity
information in their assessment of installations. Air Force officials did
provide limited capacity information in their final BRAC report. Table 15
provides excess capacity percentages that were calculated for two areas.

Table 15: Excess Capacity Identified by the Air Force, by Function

Percentage of Function excess capacity

Flight line and ramp

Building and facilities

Source: Department of the Air Force.

3Air Force officials defined three types of surge, which increase
operations in response to a situation or event. For example, local surge
increases flying time; regional surge mobilizes and deploys military
forces; and strategic surge includes large-scale return of forces from
overseas or large scale mobility operations.

4Air Force BRAC installations fell into eight major commands: (1) Air
Mobility Command, (2) Air Combat Command, (3) Air Force Space Command, (4)
Air Force Materiel Command, (5) Air Force Special Operations Command, (6)
Air Education and Training Command, (7) Pacific Air Force, and (8) Air
Force Reserve Command. The Air National Guard was included in the
analysis, although it is not considered a major command.

                                   Appendix V
                   The Department of the Air Force Selection
                          Process and Recommendations

According to Air Force officials, their recommendations if implemented are
projected to reduce excess capacity by 37 percent for flight line and ramp
space and 75 percent in buildings and facilities.

Military Value Analysis	In completing its military value data calls, the
Air Force evaluated each of its bases in each of the eight mission
categories, regardless of the base's current use. Military value data
analysis was directly linked to the four DOD military value selection
criteria required by the BRAC process and legislation. As shown in table
16, the Air Force developed a weighting system for the military value
criteria with the first two criteria having larger weights, or importance,
than the remaining two criteria.

Table 16: Air Force Military Value Criteria Weights

                             Figures in percentages

                            Military value criteria

1. The current and future mission capabilities and the impact on
operational readiness of the total force of the Department of Defense,
including the impact on joint warfighting, training, and readiness.

2. The availability and condition of land, facilities, and associated
airspace (including training areas suitable for maneuver by ground, naval,
or air forces throughout a diversity of climate and terrain areas and
staging areas for the use of the Armed Forces in homeland defense
missions) at both existing and potential receiving locations.

3. The ability to accommodate contingency, mobilization, surge, and future
total force requirements at both existing and potential receiving
locations to support operations and training.

4. The cost of operations and the manpower implications.

Total

Source: DOD and Department of the Air Force.

The Air Force used various military value attributes (characteristics,
factors, etc), metrics (measures), and questions related to each of the
four military value criteria. Key military value attributes included
operating environment, geographic-location factors, key mission
infrastructure, operating areas, mobility/surge, growth potential, and
cost. Other installation-specific attributes included such factors as
electromagnetic spectrum and bandwidth, munitions storage and handling,
runway dimensions, ramp area, space launch, proximity to (and quality of)
airspace and ranges, and geographical factors.

                                   Appendix V
                   The Department of the Air Force Selection
                          Process and Recommendations

Figure 11 shows how the attributes, metrics, and military value data
questions were linked to the military criteria for the fighter aircraft
mission category.

Figure 11: Selected Attributes, Metrics, and Data Questions Used to Assess
Military Value of Fighter Aircraft

Source: GAO analysis of Air Force data.

aThe BRAC military value criteria are the first four BRAC selection
criteria.

bMilitary value attributes are characteristics of each criterion. The Air
Force used a total of seven military value attributes.

cMilitary value metrics are measures for the attributes. The Air Force
used a total of 23 military value metrics for the fighter mission
compatibility index.

dThe Air Force used a total of 23 out of a total of 154 military value
data call questions for the Fighter Mission Compatibility Index. The Air
Force commonly referred to metrics as questions.

The Air Force followed a similar process for all eight mission categories.
Likewise, each base was evaluated against metrics associated with each of
the eight mission categories, which resulted in multiple military values
for each base. Air Force officials stated that the resulting military
value scores enabled them to determine which bases were best to retain and
which were

                                   Appendix V
                   The Department of the Air Force Selection
                          Process and Recommendations

less desirable. This enabled them to produce mission compatibility indexes
for their bases related to each of the four military value criteria.5
However, the Air Force did not develop one composite score for each base
across all eight mission areas, which might have allowed for a clearer
distinction between lower and higher military value rankings. Instead of
developing one composite score, the Air Force established an overall
mission compatibility index score within each of the eight mission areas,
which provided each installation with eight entirely different scores for
the various mission areas. According to Air Force officials, this approach
was used to apply military judgment to select the best combination of
bases to retain.

Air Force Audit Agency's Role in the Process

During both the capacity and the military value data collection and
analysis processes, the Air Force Audit Agency provided the Air Force with
realtime evaluations of BRAC 2005 policies, procedural controls, systems,
and data to ensure accurate data and analyses support for BRAC
recommendations. One of its primary efforts involved three audits to
verify the Air Force data call responses submitted during the BRAC
process. Although the auditors found errors or inadequate source
documentation, they reported that most discrepancies were subsequently
corrected. In addition to these nationwide audits, the Air Force Audit
Agency produced audit reports on other facets of the BRAC process,
including the Air Force Internal Control Plan, COBRA data, and various
modeling and analysis tools that were used in development of
recommendations.6 The final Air Force Audit Agency reports on BRAC data
concluded that overall the Air Force data were reliable for the purpose of
developing recommendations.

5 The mission compatibility indexes list each of the 154 installations
considered in the Air Force BRAC process, with its respective scores for
the overall mission; current and future mission; condition of
infrastructure; contingency, mobilization, and future forces; and cost of
operations and manpower.

6 The Air Force Audit Agency performed audits on the following areas for
BRAC 2005: Air Force Internal Control Plan, Installations Inventory,
Installation Capacity Analysis Questionnaire, Base Realignment and Closure
Data Collection System, Air Force Data Collection, Joint Cross-Service
Group Data Collection, Joint Action Scenario Team Data Collection,
Installation Visualization Tool Data Reliability, NOISEMAP Reliability,
Air Force Analysis, Cost of Base Realignment Actions, Cueing and Analysis
Tools, and BRAC Facility Analysis Capability.

                                   Appendix V
                   The Department of the Air Force Selection
                          Process and Recommendations

Identification and Assessment of Alternate Scenarios and Selection of
Recommendations

The Air Force identified over 100 scenarios, which were later reduced to
42 recommendations.7 The Air Force scenario teams8 identified potential
scenario groups of like weapons systems, and then the Base Closure
Executive Group selected scenarios for analysis. While the Air Force
relied on certified data to identify proposed closure and realignment
recommendations, other factors were instrumental in guiding decisions for
closures and realignments, including changes in unit sizing, a decreased
force structure, the active and reserve mix and future total force
initiatives such as those discussed in the Expeditionary Air Force White
Paper. Toward the end of the BRAC process, the Air Force eliminated and
scaled back several recommendations because they did not actually result
in net savings. In addition, the Air Force combined several interrelated
recommendations (some that provide savings and some that do not) to
present a consolidated recommendation with savings and a shorter payback
period than would otherwise appear had some recommendations.

The military value data were analyzed by a computer-generated optimization
model called the Air Force cueing tool. This model used the military value
data and the 20-year force structure plan to create a starting point for
Base Closure Executive Group deliberations by allocating aircraft to the
fewest bases while conserving the greatest military value. This model also
included Air Force imperatives. For example, to ensure unimpeded access to
polar and equatorial earth orbits for U.S. satellites, the Air Force
decided that Vandenberg Air Force Base, California, and Patrick Air Force
Base, Florida, must be retained. Likewise, the Air Force retained Andrews
Air Force Base, Maryland, to provide support to the President of the
United States. According to Air Force officials, the cueing tool results
were the starting point for analysis in allocating its inventory of
aircraft. The model had various limitations, such as its inability to
factor the active/reserve force mix for specific types of aircraft or the
different types of aircraft at an installation. Furthermore, it assumes
that all aircraft are bedded down at bases ranked highest in military
value, which generally were active bases. To address these limitations,
the Base Closure Executive Group relied on military judgment in some cases
to overrule the results of the model to

7 According to the Air Force's BRAC report, it recommends 72 BRAC closures
and realignments. However, it presented only 42 recommendation narratives
because various realignment actions were combined.

8 The Air Force scenario teams in BRAC 2005 were the Combat Air Forces,
Mobility Air Forces, Space, and Integration.

Appendix V
The Department of the Air Force Selection
Process and Recommendations

preserve the existing active/reserve force mix, a ratio expectation to be
maintained through 2011.

In reviewing alternatives for BRAC recommendations, the Air Force went
through various iterations of the BRAC recommendations (called second
look, third look, and so forth) in order to provide force structure
alignments that conformed to the Air Force principles and improved
military capability and efficiency, consistent with sound military
judgment. Air Force scenario teams analyzed the results of the analytical
tools, including information to be considered with each recommendation-for
example, force structure reductions from the future year force structure
plan, new missions, military construction requirements, homeland defense
missions, and other areas. Furthermore, the scenario teams were
responsible for identifying any "showstoppers," in terms of capacity or
environmental characteristics that would make a recommendation difficult
to implement. These consisted of running a potential recommendation
through the COBRA model and developing the information for selection
criteria 6 (economic impact), 7 (community infrastructure), and 8
(environmental impact) to help identify or evaluate possible closure and
realignment actions.

The majority of the candidate recommendations had various components
derived from using the optimization model; however, a few of the
recommendations did not. For example, a few of the candidate
recommendations involved realigning aircraft from an active base to an Air
National Guard station with a lower military value score in order to
achieve the appropriate mix between active and reserve forces and to
increase the standard squadron size. Further, in some recommendations Air
National Guard aircraft were realigned to other Air National Guard
stations with a lower military value to align common versions of weapon
system types, and for strategic interests.9

Four other recommendations were not derived from an optimization model
because the model primarily focused on the bedding down of aircraft rather
than specific functional areas, such as repair facilities. These
recommendations involved logistics support centers, standard air

9 For example, Bangor Air Guard Station, Maine, is a receiver in the
realignment of Birmingham Air Guard Station, Alabama, although it has a
lower military value score for the tanker Mission Compatibility Index than
Birmingham Air Guard Station. However, the Bangor Air Guard Station is
used by the Air Force as a host base for the Northeast Tanker Task Force
in order to support transatlantic air operations.

                                   Appendix V
                   The Department of the Air Force Selection
                          Process and Recommendations

munitions packages (munitions storage), and avionics intermediate repair
and maintenance facilities. Air Force officials told us they had requested
that the Industrial Joint Cross-Service Group consider the above candidate
recommendations in its process, but the group declined and deferred to the
Air Force because it was considering scenarios at a joint operational
level rather than at the installation level. As a result, Air Force
officials told us that they applied either a Mission Compatibility Index
approach to these scenarios in deliberative session to assess
installations for future missions or they recommended certain functions to
follow the placement of aircraft in other Air Force recommendations.

Recommendations 	The Air Force recommended closing 10 installations (3
active, 3 Air Reserve, and 4 Air National Guard bases) and realigning 62
other

Approved by DOD	installations.10 In total, the Air Force projected its
BRAC recommendations to result in 20-year net present value savings of
over $14 billion-the largest projected savings of any service or Joint
Cross-Service Group-and net annual recurring savings of $1.2 billion.
Table 17 shows the financial aspect of the Air Force recommendations.

         Table 17: Financial Aspects of the Air Force's Recommendations

                 Fiscal year 2005 constant dollars in millions

                                                       Net annual 20-year net
       DOD report One-time Net implementation recurring Payback present value
        Installation page (costs) (costs) or savingsa savings period savingsb

    Realign Eielson Air Force Base, AK AF-6 ($141.4) $594.0 $229.4 immediate
                                    $2,780.6

Close Cannon Air Force Base, NM AF-32 (90.1) 815.6 200.5 immediate 2,706.8

  Realign Pope Air Force Base, NCc AF-35 (218.1) 652.5 197.0 immediate 2,515.4

Realign Grand Forks Air Force Base, ND AF-37 (131.5) 322.5 173.3 1 year 1,982.0

  Close Ellsworth Air Force Base, SD AF-43 (299.1) 316.4 161.3 1 year 1,853.3

Realign Mountain Home Air Force Base, AF-18, 47 (74.2) 21.2 37.8 immediate
389.0 ID

  Close Otis Air National Guard Base, MA AF-25 (103.0) 12.2 33.6 3 years 336.1

  Close Onizuka Air Force Station, CA AF-12 (123.7) (45.3) 25.9 5 years 211.0

10 According to the Air Force's BRAC report, it recommends 72 BRAC
closures and realignments. However, the Air Force presented only 42
recommendation narratives because various realignment actions were
combined.

                                   Appendix V
                   The Department of the Air Force Selection
                          Process and Recommendations

(Continued From Previous Page)

 Fiscal year 2005 constant dollars in millions Realign Beale Air Force Base, CA
                      AF-10 (45.4) (34.6) 3.9 14 years 6.4

                                                 Net                  20-year 
                                                 annual                   net 
                   DOD   One-time Net                                 present 
                  report          implementation recurring   Payback    value 
    Installation   page   (costs) (costs) or       savings    period savingsb 
                                  savingsa                           
Close Niagara                                                              
     Falls Air    AF-33                      5.3      20.1              199.4
      Reserve                                                        
      Station,             (65.2)                            2 years 
         NY                                                          
Realign Robins                                                             
     Air Force    AF-16     (6.7)           31.9      15.0 immediate    175.1
      Base, GA                                                       
     Close W.K.                                                               
    Kellogg Air   AF-27     (8.3)           46.7      12.7 immediate    166.8
Guard Station,                                                    
         MI                                                          
    Close Kulis                                                               
     Air Guard     AF-7    (81.4)        (20.6 )      17.3   4 years    146.7
    Station, AK                                                      
    Realign New                                                               
     Castle Air   AF-15                     29.1       9.6              120.1
Guard Station,          (15.5)                             1 year 
         DE                                                          
      Realign                                                                 
Nashville Air  AF-44    (25.4)         (16.7)      13.7   2 years    120.0
Guard Station,                                                    
         TN                                                          
      Realign                                                                 
    Portland Air  AF-41    (85.5)         (36.2)      14.0   7 years    100.2
Guard Station,                                                    
         OR                                                          
Realign Martin                                                    
     State Air    AF-24                     13.7       8.7           
Guard Station,           (9.4)                             1 year 
         MD                                                          
       Close                                                         
     Mansfield    AF-39                      3.1       8.7           
     -Lahm Air                                                       
       Guard               (33.4)                            3 years 
    Station, OH                                                      
    Realign Hill                                                     
     Air Force    AF-47    (28.2)            8.2       8.1   4 years 
      Base, UT                                                       
      Realign                                                        
    Andrews Air   AF-23    (21.7)           12.2       7.5   2 years 
Force Base, MD                                                    
Realign Naval                                                     
    Air Station   AF-22                               11.3           
    New Orleans            (50.2)         (32.5)             5 years 
    Air Reserve                                                      
    Station, LA                                                      
Establish Air                                                     
       Force      AF-53                     19.2       6.1           
     logistics                                                       
      support               (9.3)                             1 year 
      centers                                                        
Close General                                                     
    Mitchell Air  AF-52                                6.5           
      Reserve              (38.4)        (14.3 )             5 years 
    Station, WI                                                      
      Realign                                                        
    Lackland Air  AF-46     (8.1)            4.7       2.9   2 years 
Force Base, TX                                                    
      Realign                                                                 
    Bradley Air   AF-14     (3.2)            6.1       2.0   2 years     25.2
Guard Station,                                                    
         CT                                                          
      Realign                                                                 
Reno-Tahoe Air AF-31                                3.6               22.7
Guard Station,          (22.9)         (12.2)             9 years 
         NV                                                          
Realign Great                                                              
     Falls Air    AF-30                      0.7       1.8               18.1
Guard Station,           (9.3)                            4 years 
         MT                                                          
Realign March                                                              
    Air Reserve   AF-11    (10.8)          (1.9)       1.8   5 years     15.5
      Base, CA                                                       
      Realign                                                                 
    Richmond Air  AF-50    (24.2)         (11.6)       2.5  10 years     13.2
Guard Station,                                                    
         VA                                                          
Realign Hector                                                             
     Air Guard    AF-38     (1.8)            3.3       1.0   2 years     12.9
    Station, ND                                                      
      Realign                                                                 
Fairchild Air  AF-51     (6.4)          (1.6)       1.0   7 years      8.3
Force Base, WA                                                    
     Establish                                                                
    centralized   AF-49                      1.5       0.7                8.3
    intermediate                                                     
       repair               (1.8)                            3 years 
     facility -                                                      
F-15 Avionics                                                     
    (Langley Air                                                     
    Force Base,                                                      
        VA)                                                          
Realign Duluth                                                             
     Air Guard    AF-28     (2.1)            0.2       0.8   5 years      7.8
    Station, MN                                                      
Establish F100                                                             
       engine     AF-55                                1.1                7.1
    centralized             (9.2)          (3.8)             9 years 
    intermediate                                                     
       repair                                                        
     facilities                                                      

                                   Appendix V
                   The Department of the Air Force Selection
                          Process and Recommendations

(Continued From Previous Page)

                 Fiscal year 2005 constant dollars in millions

                                                 Net annual recurring savings

Payback period

                                           20-year net present value savingsb

DOD report page

One-time (costs)

Net implementation (costs) or savingsaInstallation

    Realign Capital Air Guard    (19.9)     (13.3)      2.0   13    
        Station, IL AF-20                                    years  
Realign Ellington Air Guard   (1.6)         0.1      0.4 5 years 
        Station, TX AF-45                                           
Realign Key Field Air Guard   (10.7)      (6.9)      0.9   13    
        Station, MS AF-28                                    years  
     Realign Schenectady Air                            0.6         
      Guard Station, AF-34       (3.5)       (3.3)          8 years 
               NY                                                   
     Realign Fort Smith Air      (17.6)     (12.4)      1.4   16    
     Guard Station, AR AF-8                                  years  
Realign Boise Terminal Air                           0.3         
           Guard AF-17           (2.5)       (1.6)          8 years 
           Station, ID                                              
Realign Springfield-Beckley                          0.9   17    
         Air Guard AF-40         (11.4)      (8.4)           years  
           Station, OH                                              
     Realign Birmingham Air                             0.8   18    
       Guard Station, AF-5       (11.0)      (7.7)           years  
               AL                                                   
              Total            ($1,883.1) $2,635.5 $1,248.5         $14,560.3 

Source: GAO analysis of DOD data.

aThis represents net costs or savings within the 6-year implementation
period required to implement BRAC recommendations.

bDOD used a 2.8 percent discount rate to calculate net present value.

cThe Pope Air Force Base recommendation includes the closure of Pittsburgh
Air Reserve Station and the realignment of Yeager Air Guard Station and
Little Rock Air Force Base.

Over 80 percent of the projected 20-year savings are based on the first 5
recommendations shown in table 17, which involve closing two and
realigning three active bases and have payback periods of 1 year or less.
Conversely, the one-time costs of over $1.8 billion to implement all
recommendations are primarily comprised of new military construction to
implement the recommendations. Most of the Air Force's recommendations
involve realignment of Air Guard facilities with limited savings. For
example, the Air Force is proposing to realign five Air National Guard
stations, with payback periods greater than 10 years and $12 million in
20-year savings, with onetime costs of about $71 million. According to Air
Force officials, these proposals were necessary because the Air Force
recommendations are interwoven, depending on realignment actions from
other recommendations. For example, 72 realignment and closure
recommendations involving active and reserve installations were combined
to create 42 candidate recommendations. At least one segment

Appendix V
The Department of the Air Force Selection
Process and Recommendations

of all but 3 of the 42 Air Force recommendations that were combined11
affects the Air Force Reserve Command or Air National Guard.

Based on our analysis we noted that the majority of the net annual
recurring savings (60 percent) are cost avoidances from military personnel
eliminations. However, eliminations are not expected to result in
reductions to active duty, Air Reserve and Air National Guard end
strengths, limiting savings available for other purposes.

None of the recommendations included in the Air Force's report involve
consolidation or integration of activities or functions with those of
another military service.12 However, the Air Force believes that its
recommendations to realign Pope Air Force Base, North Carolina, and
Eielson Air Force Base, Alaska, and to move A-10 aircraft to Moody Air
Force Base, Georgia, will provide an opportunity for joint close air
support training with Army units stationed at Forts Benning and Stewart,
Georgia. Furthermore, the Air Force's recommendations support
transformation efforts by optimizing (increasing) squadron size for most
fighter and mobility aircraft.13 According to the Air Force BRAC report,
the recommendations maximize warfighting capability by fundamentally
reshaping the service, effectively consolidating older weapons systems
into fewer but larger squadrons, thus reducing excess infrastructure and
improving the operational effectiveness of major weapons systems. We have
previously reported that the Air Force's could not only reduce

11 The three recommendations that do not affect the reserve component
include the closure of Onizuka Air Force Station, California; the
realignment of Langley Air Force Base, Virginia; and the Air Force
logistics support centers recommendation.

12 Joint cross-service groups and other service recommendations do,
however, allow for increased jointness with the Air Force. For example,
Eglin Air Force Base, Florida, will host Joint Strike Fighter pilot
training and will also host the Army's Seventh Special Forces Group in
conjunction with Education and Training Joint-Cross Service Group and Army
recommendations, creating substantial joint training opportunities.
Additionally, the Air Force enables Army closures and realignments by
turning over property ownership of Pope Air Force Base to the Army, though
an active/Air Reserve unit will permanently be based at Fort Bragg, North
Carolina, to assist with the aerial port and tactical airlift capabilities
needed by the Army's Airborne Corps.

13 Based on senior military judgment reflected in the Expeditionary Air
Force Principles White Paper, fighter squadrons will be optimally sized to
24 aircraft per squadron, and 18 is the acceptable size per squadron for
stand-alone reserve installations. Sixteen is the optimum size for C-130s
(airlift aircraft) and KC-135s (tanker refueling aircraft), and 12 is the
acceptable size for stand-alone reserve installations.

                                   Appendix V
                   The Department of the Air Force Selection
                          Process and Recommendations

infrastructure by increasing the number of aircraft per fighter squadron
but could also save millions of dollars annually.14

Issues Identified with Approved Recommendations

Time did not permit us to assess the operational impact of each
recommendation, particularly where recommendations involve multiple
locations. Nonetheless, we offer a number of broad-based observations
about the proposed recommendations and selected observations on some
individual recommendations. Our analysis of the Air Force recommendations
identified some issues that the BRAC Commission may wish to consider, such
as the projected savings from military personnel reductions; impact on the
Air National Guard, impact on other federal agencies; and other issues
related to the realignments of Pope Air Force Base, North Carolina;
Eielson Air Force Base, Alaska; and Grand Forks Air Force Base, North
Dakota and the closure of Ellsworth Air Force Base, South Dakota.

Military Personnel Savings	Our analysis showed that about $732 million, or
about 60 percent, of the projected $1.2 billion net annual recurring
savings are based on savings from eliminating military personnel
positions. Initially, the Air Force counted only military personnel
savings that resulted in a decrease in end strength. However, at the
direction of OSD, the Air Force included savings for all military
personnel positions that were made available through realignment or
closure recommendations. The Air Force was unable to provide us
documentation showing at the present time to what extent each of these
positions will be required to support future missions. According to Air
Force officials, they envision that most active slots will be needed for
formal training, and all the Air Reserve and Air National Guard personnel
will be assigned to stressed career fields and emerging missions.
Furthermore, Air Force officials said that positions will also be reviewed
during the Quadrennial Defense Review, which could decrease end strength.
Either way, claiming such personnel as BRAC savings without reducing end
strength does not provide dollar savings that can be reapplied outside
personnel accounts and could result in the Air Force having to find other
sources of funding for up-front investment costs needed to implement its
BRAC recommendations.

14 GAO, Air Force Aircraft: Consolidating Fighter Squadrons Could Reduce
Costs, GAO/NSIAD-96-82 (Washington, D.C.: May 6, 1996).

                                   Appendix V
                   The Department of the Air Force Selection
                          Process and Recommendations

Impact on the Air National Guard and Reserve Components

At least one segment of all but 3 of the 42 Air Force recommendations that
were combined15 affects the Air Force Reserve Command or Air National
Guard. The Air Force BRAC report lists 7 closures and 35 Air Reserve and
Air National Guard realignments.16 Overall, 68 Reserve Command (12) and
Air National Guard (56) installations were affected by a closure or
realignment, or they received aircraft or missions from these actions.
According to Air Force officials, its BRAC recommendations have resulted
in a reduction of 29 installations with flying missions. Of these reduced
installations with flying missions, over 75 percent, or 22, are from the
Air National Guard. If implemented the BRAC recommendations will affect
over 30 percent of the 70 Air National Guard and 13 Air Reserve
installations with air flying units, respectively. Table 18 shows the
reduction of flying units in the BRAC process by active force, Air Force
Reserve Command, and the Air National Guard.

Table 18: Impact of Air Force BRAC Recommendations on Installations with
Flying Missions, by Component

                              Installations with flying  
                                      missions                  Change        
                   Component          Pre-BRAC Post-BRAC   Number Percentagea 
                      Active                       59 56          3           
           Air Force Reserve                        13 9          4           
          Air National Guard                       70 48          22          
                       Total                     142 113          29          

Source: Department of the Air Force.

aAll percentage changes were calculated by using the change in number of
installations with air flying units divided by the pre-BRAC total
installation number of 142.

Based on our analysis of COBRA data, we estimate that more than 1,419
positions in the Air Reserve and 5,700 positions in the Air National Guard

15 The three recommendations that do not affect the reserve component
include the closure of Onizuka Air Force Station, California; the
realignment of Langley Air Force Base, Virginia; and the Air Force
logistics support centers recommendation.

16 The Department of the Air Force Analysis and Recommendations BRAC 2005,
volume 5, part 1 of 2, page iii, lists 31 Air National Guard and 4 Air
Reserve installations that were realigned. The Willow Grove Air Reserve
Station realignment action is located in the Department of the Navy
section of DOD's BRAC report.

Appendix V
The Department of the Air Force Selection
Process and Recommendations

will be affected by the proposed recommendations, in terms of military
personnel and civilians eliminated and realigned. In recommendations
affecting active installations, over 26,000 positions are affected
(eliminated and realigned); however, since the Air Force has combined
active and reserve component actions in some recommendations those
positions also include additional Air National Guard and Air Reserve
personnel.17 Also the Air Force recognizes that in moving Air National
Guard and Air Reserve units, part-time military (commonly referred to as
drill) personnel will also be affected since they will not be moved.18 A
significant portion of the personnel associated with these units must be
replaced at the gaining installation and will require training. At Air
National Guard installations with flying units, over 30 percent have been
recommended for realignment or retirement; many of the personnel positions
associated with the units do not have missions. Air Force officials said
they plan to use these positions for emerging missions in such areas as
homeland security, unmanned aerial vehicles, and intelligence, which they
expect to further refine as part of the ongoing Quadrennial Defense
Review.

Initially, many of the Air Force proposals involving the Air National
Guard and Air Force Reserve with payback periods ranging from 10 to more
than 100 years were stand-alone recommendations. Those recommendations
linked by related operational realignment actions were grouped together to
produce recommendations that had significant savings and minimized the
longer payback periods. We found that this occurred in the realignment of
Lambert-St. Louis International Airport Air Guard Station, Missouri, which
originally had a 63-year payback period and resulted in a 20-year net
present value cost of $22 million. However, this realignment is now a part
of the closure of Otis Air National Guard Base, Massachusetts, and the
realignment of Atlantic City Air Guard Station, New Jersey because of
related operational realignment actions. The current combined
recommendation results in a 20-year net present value savings of $336
million and a 3-year payback period. Figure 12 shows the various BRAC
actions in this recommendation. For example, 18 F-15 fighter aircraft are

17 For example, the Pope Air Force Base recommendation, which primarily
affects active duty units, also includes the closure of Pittsburgh Air
Reserve Station, realignment of Yeager Air Guard Station and Little Rock
Air Force Base, thus affecting active, Air Reserve, and Air National Guard
personnel.

18 The Air Force presented further information regarding the impact of
BRAC recommendations on manpower including full time and drill personnel
in the Air Force reserve component document titled, State-by-State
Installation View, May 13, 2005.

                                   Appendix V
                   The Department of the Air Force Selection
                          Process and Recommendations

realigned from Otis Air National Guard Base and Lambert-St. Louis Air
Guard Station to Atlantic City Air Guard Station. Furthermore, all three
Air Guard Stations also realign other aircraft to three separate
installations, Nellis Air Force Base, Nevada; Burlington Air Guard
Station, Vermont; and Jacksonville Air Guard Station, Florida.

Figure 12: Realignment of Fighter Aircraft at Lambert-St. Louis Air Guard
Station and Otis Air National Guard Base

+ Denotes receiving fighter aircraft

-Denotes losing fighter aircraft Source: Department of the Air Force.

Finally, questions have been raised by various state officials whether the
Secretary of Defense is authorized to close or realign Air National Guard
bases without the consent of the state governor. DOD's Office of General
Counsel has not issued a legal opinion on this issue. According to an Air
Force official, as of the date of this report, there have been no legal
challenges brought against DOD regarding this issue.

Impact on the Coast Guard	The Air Force recommendation to close Otis Air
National Guard Base could impact the U.S. Coast Guard.19 While the Air
Force officials recognized the

19 The U.S. Coast Guard has eight helicopters at Otis Air National Guard
Base, Massachusetts.

                                   Appendix V
                   The Department of the Air Force Selection
                          Process and Recommendations

Coast Guard could be affected if the base was closed, their cost and
savings analysis did not consider any costs that could be incurred by the
Coast Guard. Air Force officials stated they didn't have access to
credible cost data during the BRAC process since cost estimates would have
been speculative; the Air Force could not assume the final disposition of
the facility and how much, if any, of the facility the Coast Guard would
opt to retain. The Coast Guard is in the process of developing potential
basing alternatives, to include costs impacts, for each affected location.
Subsequent to the recommendations being made public, the Coast Guard
estimated that they would incur about $17 million in additional annual
operating costs to remain at Otis Air National Guard Base.

Realignment of Selected Active Bases

The realignment of Pope Air Force Base20 involves the transfer of 100
percent of the acres and facilities to the Army to become part of Fort
Bragg, with a C-130 active/reserve associate unit remaining to support the
Army. Our analysis indicates that there is a significant difference
between the savings claimed by the Air Force and the costs projected by
the Army regarding base operations support, recapitalization, and
sustainment for facilities on Pope Air Force Base. For example, the Air
Force claimed total net annual recurring savings of about $36 million for
not providing base operations support and recapitalization and sustainment
of facilities on Pope Air Force Base. However, the Army estimated total
annual recurring costs for these areas to be about $19.5 million. This
estimated cost comprises over $13 million from the Army as well as over
$5.5 million from the Air Force to remain as tenant at Fort Bragg.
According to Army officials, their estimated costs included taking
ownership for all facilities on Pope Air Force Base.

The Air Force is also proposing to realign Eielson Air Force Base by
moving all active duty units, leaving the Air National Guard units, and
hiring contractors to provide base operating support and maintenance and
repair of the facilities. The Air Force projects this action would produce
a 20-year net present value savings of $2.8 billion, the most of any Air
Force recommendation. Air Force officials said the decision to realign
Eielson was made because of the high cost of operating the base and its
value as major training site. The officials noted that the realignment
will enable the Air Force to expand an annual training exercise as well as
provide

20 The Pope Air Force Base recommendation includes the closure of
Pittsburgh Air Reserve Station and the realignment of Yeager Air Guard
Station and Little Rock Air Force Base.

Appendix V
The Department of the Air Force Selection
Process and Recommendations

opportunities for increase use of the training area by other Air Force
units. However, we have some question about the facilities that need to be
retained to support the training mission and Air National Guard units.
While the Air Force plans to give up the base family housing, it appears
that all other base facilities would be retained. For example, Air Force
COBRA data indicates that there will be no reduction in the square feet of
facilities. The data also indicates that 64 percent of the facilities will
be sustained at current funding.

The Air Force proposed to close Grand Forks Air Force Base21 but this was
changed to a realignment by the Infrastructure Executive Council a week
before the recommendations were finalized within the department. As a
result, the projected savings were significantly reduced, as shown in
table

19.

Table 19: Comparison of Alternatives to Closing or Realigning Grand Forks
Air Force Base

                 Fiscal year 2005 constant dollars in millions

Closure Realignment recommendation recommendation Difference

                              One-time costs   ($128.6)    ($131.5)    ($2.9) 
                          6-year net savings    $490.0        $322.5   $167.5 
               Net implementation (costs) or    $226.6        $173.3    $53.3 
                                     savings                         
                              Payback period  immediate       1 year   1 year 
           20-year net present value savings   $2,656.3    $1,982.0    $674.3 

Source: GAO analysis of Air Force data.

The decision to realign rather than close the base did not affect the need
to move current aircraft and associated personnel to other bases to
achieve the active and reserve mix. According to the Air Force BRAC
report, this change to a realignment was based on military judgment to
keep a strategic presence in the north central United States and on the
fact that Grand Forks Air Force Base ranked high for acquiring a possible
unmanned aerial

21 The Grand Forks Air Force Base recommendation also includes the
realignment of McConnell Air Force Base.

                                   Appendix V
                   The Department of the Air Force Selection
                          Process and Recommendations

vehicle mission.22 Even though Grand Forks Air Force Base was retained for
strategic reasons, Minot Air Force Base is also located in North Dakota
and is not affected by any BRAC recommendation. Furthermore, Minot Air
Force Base scored only 3.4 points less than Grand Forks Air Force Base in
the unmanned aerial vehicle mission area.

Closure of Ellsworth Air Force Base

The Air Force is proposing to close Ellsworth Air Force Base, South
Dakota, and move its 24 B-1 bomber aircraft to Dyess Air Force Base, Texas
to achieve operational efficiencies at one location. Ellsworth Air Force
Base ranked lower in the military value than Dyess Air Force Base. In the
1995 BRAC round,23 the Air Force considered but chose not to close
Ellsworth Air Force Base out of concern over placing all B-1 aircraft at a
single location. In contrast, one of the Air Force principles which guided
the BRAC 2005 process emphasized consolidating or co-locating legacy
fleets such as the B-1 aircraft. Air Force officials stated that they no
longer had concerns about consolidating the B-1 fleet in one location
because it does not have the same operational mission requirements it had
10 years ago.

22 The Infrastructure Executive Council examined the strategic presence of
Grand Forks Air Force Base in the central United States after all the
service and Joint Cross-Service Group candidate recommendations were
evaluated as an aggregate.

23 GAO, Military Bases, Analysis of DOD's 1995 Process and Recommendations
for Closure and Realignment, GAO/NSIAD-95-133 (Washington, D.C.: Apr. 14,
1995).

Appendix VI

Education and Training Joint Cross-Service Group Selection Process and
Recommendations

The Education and Training Joint Cross-Service Group followed the common
analytical framework established by the Office of the Secretary of Defense
(OSD) for reviewing its functions and facilities. The group produced a
relatively small number of recommendations (nine) compared with the amount
of excess capacity it identified. The group reported that the
Infrastructure Steering Group (ISG) or the Infrastructure Executive
Council (IEC) had each disapproved two recommendations for various
reasons, and four recommendations were rolled into military department
recommendations and are discussed in appendixes related to these groups.
The group's recommendations are projected to produce $1.3 billion in net
present value savings over a 20-year period. For these recommendations,
the length of time required for the savings to offset closure costs varied
widely, with two recommendations expected to take just 1 year, two other
recommendations requiring 13 and 16 years, respectively, and one never
having any payback. We identified issues regarding the projected savings
and extended payback periods with some recommendations that may warrant
further attention by the BRAC Commission. The DOD Inspector General and
service audit agencies, which performed audits of the data used in the
process, concluded that the data were sufficiently reliable for use during
the BRAC process.

Organization and Focus

The overarching goal of the Education and Training Joint Cross-Service
Group was to pursue those educational and training economies and
efficiencies that enhance readiness and promote academic synergies for
more joint or interservice education. The group was chaired by the
Principal Deputy Under Secretary of Defense (Personnel and Readiness),
with senior-level members from Air Force Manpower and Reserve Affairs,
Marine Corp Training and Education Command, Army and Naval Personnel, and
the Joint Staff. This cross-service group was organized into four
subgroups,1 focusing on (1) flight training, (2) specialized skill
training, (3) professional development education, and (4) ranges.

The group identified five principles that were used to provide focus to
its work:

o 	Advance jointness: Declare jointness paramount for specific functions.
Establish Joint National Training Capability.

1 At the Office of the Secretary of Defense, the ISG and the IEC provided
overall coordination and direction to the DOD-wide process.

 Appendix VI Education and Training Joint Cross-Service Group Selection Process
                              and Recommendations

o 	Achieve synergy: Jointly construct, co-locate or put in close proximity
multiple functions that are mutually supportive. Increase crossfunctional
use of training and testing ranges.

o 	Capitalize on technology: Leverage distance learning capability to
significantly reduce residential requirements.

o 	Exploit best practices: Establish centers of excellence. Outsource to
alternative providers.

o 	Minimize redundancy: Identify common functional areas and eliminate
duplication, reduce or avoid costs, standardize instruction, and increase
efficiency.

The organizational structure and the above guiding principles provided a
framework to evaluate the potential of a broad series of transformational
options to improve DOD education and training.

Framework for 	Capacity and military value analysis became the starting
point for the group's analyses. The DOD Inspector General and service
audit agencies

Analysis	performed an important role in ensuring the accuracy of data used
in these analyses through selective audits of data gathered at various
locations.

Capacity Analysis	To form the basis for its analyses, the group developed
metrics in each of the functional areas to measure capacity and
subsequently collected certified data linked to these metrics from various
defense activities whose missions resided within these categories. Each
subgroup developed metrics to analyze capacity and to compare the various
functions. The major standards used by each subgroup are described below:

o 	For undergraduate fixed and rotary flight training, runway and airspace
capacity were the primary metrics used to analyze capacity. Runway
capacity for fixed wing aircraft was calculated using Federal Aviation
Administration standards to define the number of runway operations that
could be conducted during daylight hours for 244 training days, at 12
hours per day. This approach accounted for weather conditions, the number
and configuration of runways, the mix of aircraft, and the percentage of
touchdown/takeoff operations. Other metrics included

Appendix VI Education and Training Joint Cross-Service Group Selection
Process and Recommendations

the amount of ramp (apron) space and ground-training facilities, such as
classrooms and simulators.

o 	For professional development education, capacity was based on classroom
equivalent hours available on a 6-hour training day basis for 244 days a
year. Classroom equivalent hours represent the number of 1hour classes (15
students per class) that can be held in designated facilities, and they
are based on available classroom space and instructor office space.

o 	For specialized skill training, capacity was measured by the student
population that can be sustained by the number of available dormitory
rooms, dining facilities, and classrooms. This figure was based on an
8hour training day for 244 days per year.

o 	For ranges, capacity was based on the volume and time for training and
open air testing at ground, air, and sea levels.

Each subgroup focused its capacity analysis on the existing capability to
perform specific functions. Surge requirements, where applicable, were
determined by military judgment. Excess capacity was defined as current
capacity less current usage plus surge capacity. As seen in table 20,
significant excess capacity was identified across all education and
training functions except for the ranges subgroup.

Appendix VI Education and Training Joint Cross-Service Group Selection
Process and Recommendations

Table 20: Excess Capacity Identified by the Education and Training Joint
Cross-Service Group

                                                                Percentage of 
                                                              excess capacity 
                    Subgroup/function     Capacity metric          (shortage) 
                      Flight training              Runway                  45 
             Undergraduate fixed wing            Airspace                  51 

Ramp space

Classrooms

Simulator

Undergraduate rotary wing Runway

Ramp space

Classrooms

Simulator

Undergraduate navigator/naval Runway 57

flight officer Airspace 35

Ramp space

Classrooms

Simulator

Professional development Classroom equivalent hours education

Specialized skill training Dormitory rooms

                             Dining facilities (45)

Classrooms

                Ranges                   Ground acreage                  0 
               Training                Air nautical miles                0 
                                       Sea nautical miles               28 
          Test and evaluation           Open air testing                 9 

Source: Education and Training Joint Cross-Service Group.

The percentage of excess capacity includes consideration of surge
requirements for all functions except professional development education.2

2 Since there was no standard definition, three of the subgroups
identified surge requirements on a judgmental basis as a percentage of
capacity raging from 10 to 25 percent. The professional development
education subgroup did not identify a surge requirement.

 Appendix VI Education and Training Joint Cross-Service Group Selection Process
                              and Recommendations

According to service officials, in the event of a mobilization,
postgraduate educational institutions and facilities would cease to
operate and the students would revert back to their warfighting duties.
The surge requirements for the remaining functions were based on military
judgment. For example, the flight and specialized skill training subgroups
used a 20 percent surge factor based on a review of current planning
documents and military judgment. Likewise, a 25 percent surge factor was
used for training ranges and a 10 percent factor for test and evaluation
ranges, based on military judgment. According to service officials, a
higher surge factor was used for training ranges to meet anticipated
training needs for contingencies and mobilization, while test and
evaluation are more measured and predictable and less likely to generate
large surge loads on test and evaluation missions.

The group did not analyze the extent to which its proposed recommendations
would reduce excess capacity across all education and training functions.
Nonetheless, the Air Force estimated that the recommendation to
consolidate undergraduate pilot training would reduce excess capacity by 2
percent. At the same time, the excess capacity identified will remain in
undergraduate rotary wing training because the Navy could not agree on a
scenario to consolidate training. Since there were no recommendations
involving training ranges, there was no reduction in excess capacity in
the sea and open air testing areas.

Military Value Analysis	Each subgroup developed military value scoring
plans to analyze and rank each training facility using DOD's four military
value selection criteria. The subgroups assigned weighted values to each
of the four criteria based on relative importance in assessing the
military value of a site under each subgroup and related functions. Table
21 shows the weights for each subgroup.

 Appendix VI Education and Training Joint Cross-Service Group Selection Process
                              and Recommendations

Table 21: Education and Training Joint Cross-Service Group Military Value
                                Criteria Weights

                             Figures in percentages

Professional Specialized development Military value criteria Flight
training skill training education Ranges

1. The current and future mission capabilities and the impact on  40 44 40 
     operational readiness of the total force of the Department of         
Defense, including the impact on joint warfighting, training, and       
                              readiness.                                   

      2. The availability and condition of land, facilities, and     35 32 25 
                              associated                                   
      airspace (including training areas suitable for maneuver by          
                                ground,                                    
      naval, or air forces throughout a diversity of climate and           
                                terrain                                    
      areas and staging areas for the use of the Armed Forces in           
       homeland defense missions) at both existing and potential           
                         receiving locations.                              

3. The ability to accommodate contingency, mobilization, surge, 5 9 10
and future total force requirements at both existing and potential
receiving locations to support operations and training.

4. The cost of operations and the manpower implications. 20 15 25

Total 100 100 100

Source: DOD and Education and Training Joint Cross-Service Group.

Note: The system of weights provided a basis for assigning relative value
to data collected and tabulated across each military value dimension.

Some key assumptions used by the subgroups in developing scoring plans for
military value include the following:

o 	Installations with larger capacities are of comparatively greater
military value for flight training and specialized skill training.

o 	Managed training areas (particularly airspace) would be extremely hard
to reconstitute if lost due to the BRAC process.

o  Existing service qualitative training requirements must be maintained.

o  Retain unique, one-of-a-kind assets or capabilities.

Attributes varied by subgroup. For example, the flight training subgroup
identified six attributes that included airfield capacity, weather,
environmental constraints (air quality, noise abatement, and
encroachment), quality of life, managed training areas, and ground
training facilities. The professional development subgroup applied
location (access to senior political and military decision makers),
educational output,

 Appendix VI Education and Training Joint Cross-Service Group Selection Process
                              and Recommendations

facilities, educational staff, and quality of life. The specialized skill
training subgroup attributes included location, quality of life issues,
training facilities/resources (number of classrooms and available
housing), support for other missions, training mission/throughput, and
environmental constraints/expansion potential. Finally, the attributes for
the ranges subgroup included personnel (experience and education),
workload, physical plant (available space and range features), synergy
with other ranges, and encroachment. Figure 13 gives an example of how the
flight training subgroup was linked to the military value criteria.

Figure 13: Selected Attributes, Metrics, and Data Questions Used to Assess
Military Value of Flight Training

Source: GAO analysis of Education and Training Joint Cross-Service Group
data.

aThe BRAC military value criteria are the first four BRAC selection
criteria.

bMilitary value attributes are characteristics of each criterion. The
flight training subgroup used a total of six military value attributes.

 Appendix VI Education and Training Joint Cross-Service Group Selection Process
                              and Recommendations

cMilitary value metrics are measures for the attributes. The flight
training subgroup used a total of 22 military value metrics.

dThe flight training subgroup used a total of 70 data call questions.

The specialized skill training, professional development education, and
ranges subgroups used similar approaches of attributes, metrics, and data
call questions to link analysis back to the military value criteria.

DOD Inspector General's and Service Audit Agencies' Roles in the Process

The DOD Inspector General and service audit agencies reviewed the data and
processes used by each subgroup to develop their recommendations. The
overall objective was to evaluate the validity, integrity, and
documentation of the data used by the subgroups. The DOD Inspector General
and service audit agencies used real-time audit coverage of data
collection and analyses processes to ensure that the data used in the
Education and Training Joint Cross-Service Group capacity analysis and
military value analysis were reliable and certified. Through extensive
audits of the data collected by each subgroup from field activities during
the process, the Inspector General and service audit agencies notified the
group about identified data discrepancies for the purpose of follow-on
corrective action. While the process for validating data was quite lengthy
and challenging, the Inspector General and the service audit agencies
ultimately determined the education and training-related data to be
sufficiently reliable for use in the BRAC process once the subgroups made
corrections to all the discrepancies.

Identification and Although corrections were later made, the group did not
have accurate and

complete capacity and military value data when it started
developingAssessment of potential closure and realignment scenarios, and
therefore, it had to rely on Alternate Scenarios incomplete data, military
judgment, and transformation options3 in and Selection of developing
initial scenarios for consideration. However, certified capacity

and military value data and results of COBRA analyses were
subsequentlyRecommendations used to support the group's final candidate
recommendations. The group initially identified 64 scenarios and selected
17 candidate

3 Some of the transformation options included privatizing graduate-level
education, establishing centers of excellence for joint or interservice
education and training by combining or co-locating like schools,
establishing joint officer and enlisted specialized skill training, and
consolidating or co-locating at a single installation all services'
primary phase of pilot training that uses the same aircraft.

Appendix VI Education and Training Joint Cross-Service Group Selection
Process and Recommendations

recommendations that were forwarded to the ISG. Four of the
recommendations were rejected by the ISG and IEC and 4 of the group's
recommendations were integrated into military service recommendations.
Ultimately, 9 recommendations were approved by the IEC.

Generally, scenarios were eliminated because they were alternatives to a
recommendation that was selected or because the services objected to the
scenario and the group leadership decided to delete it. For example, the
professional development education subgroup developed three scenarios to
streamline graduate education courses-two to consolidate these functions
at existing military facilities and another to obtain graduate-level
education at civilian colleges and universities. The group selected the
privatization option because of the significant savings; however, it was
rejected by the IEC, as discussed later. The professional development
education subgroup also developed nine scenarios to realign the
seniorlevel education courses provided by the service war colleges. The
group elected to relocate the service war colleges under the National
Defense University as the "best choice" option because it establishes a
joint strategic center of excellence in the National Capitol Region.
However, the IEC rejected this option, as discussed later. Finally, the
flight subgroup developed eight alternatives to consolidate undergraduate
pilot training. However, the Navy and the Air Force objected to these
scenarios because they believed they would result in too much disruption
to the pilot production pipeline.

The flight training subgroup was the only subgroup that used an
optimization model in its scenario analysis. The subgroup used it to
identify potential locations to consolidate undergraduate fixed wing pilot
training functions among 11 installations. According to flight subgroup
officials, the model was not used for rotary wing pilot training because
there are only two locations where this training is conducted. Likewise,
they noted that it was not used to select sites for the Joint Strike
Fighter and Unmanned Aerial Vehicle training because there were limited
sites selected for this training. Officials from the other three subgroups
stated they did not use the model because of the limited number of
facilities or functions reviewed. For example, the professional
development education subgroup compared from two to six locations within
each scenario, so the team manually developed scenarios by maximizing
military value and capitalizing on excess capacity.

 Appendix VI Education and Training Joint Cross-Service Group Selection Process
                              and Recommendations

Recommendations 	The group estimated that its recommendations will produce
$1.3 billion in 20-year savings and $236 million in net annual recurring
savings. Table 22

Approved by DOD	provides a summary of the financial aspects of the group's
recommendations, all of which are realignment actions.

Table 22: Financial Aspects of the Education and Training Joint
Cross-Service Group's Recommendations

                 Fiscal year 2005 constant dollars in millions

                                                   Net                20-year 
                                                   annual            
                                                   recurring Payback      net 
                                                                      present 
                     DOD   One-time Net             (costs)             value 
                   report           implementation    or     perioda  (costs) 
     Recommended    page    (costs)     (costs) or   savings (years)       or 
       actions                             savings                   savingsb 
Realignment to                                                             
      establish     E&T-6                   $352.4    $131.8       6   $934.2
       Combat              ($754.0)                                  
Service Support                                                   
Center at Fort                                                    
         Lee                                                         
Realignment to                                                             
    relocate Air   E&T-12                               42.6       6    319.1
       Defense              (247.0)         (93.0)                   
      Artillery                                                      
     Center and                                                      
School to Fort                                                    
        Sill                                                         
Realignment to                                                             
establish Joint E&T-10                                      never 
       Strike               (199.1)        (209.6)     (3.3)          (226.3)
Fighter initial                                                   
joint training                                                    
    site at Eglin                                                    
Air Force Base                                                    
Realignment of                                                             
       various     E&T-14                               18.3       4    174.2
    installations                                                    
         to                  (71.7)          (1.6)                   
     consolidate                                                     
    undergraduate                                                    
      pilot and                                                      
      navigator                                                      
      training                                                       
Realignment to                                                    
      relocate      E&T-5                               42.9      13 
      Aviation              (492.3)        (348.1)                   
      Logistics                                                      
School to Fort                                                    
       Rucker                                                        

    Realignment to establish Joint Center    E&T-7   (1.5)   (5.8)   1.3   1  
        of Excellence for consolidated                                    
    transportation management training at                                 
                   Fort Lee                                               

    Realignment to establish Joint  E&T-8   (5.4)      (2.6)  1.4   2  
                Center                                                 
      of Excellence for culinary                                       
             training at                                               
               Fort Lee                                                
    Realignment to establish Joint  E&T-9                4.0  0.8   1  
                Center                      (1.0)                      
     of Excellence for religious                                       
             training and                                              
      education at Fort Jackson                                        
     Realignment to relocate Army   E&T-13                    0.5   16    0.8 
                Prime                       (6.0)      (3.9)           
    Power School training to Fort                                      
               Leonard                                                 
                 Wood                                                  
                Total                      ($1,778) ($308.2) $236.3    $1,325 

Source: GAO analysis of DOD data.
aPayback period refers to the length of time required for the savings to
offset closure costs.
bDOD used a 2.8 percent discount rate to calculate net present value.

 Appendix VI Education and Training Joint Cross-Service Group Selection Process
                              and Recommendations

Our analysis indicates that $1.3 billion, or over 95 percent, of the
group's projected 20-year savings results from two recommendations that
involve only the Army-the combat service support center and the air
defense artillery center. The greater part of the projected savings from
these two recommendations is based on military personnel reductions.

While five of the nine recommendations would foster jointness, they have
limited projected savings. For example, the three recommendations that
would establish joint centers of excellence for training (culinary,
transportation management, and religious studies) are projected to produce
only $45.6 million, or less than 1 percent, of the projected 20-year
savings. Furthermore, the recommendation to consolidate the Joint Strike
Fighter training has a payback period of never and a 20-year net present
value cost of $226 million.

Issues Identified with Approved Recommendations

Time did not permit us to assess the operational impact of each of the
Education and Training Joint Cross-Service group's recommendations,
particularly where operations proposed for consolidation extend across
multiple locations outside of a single geographic area. While available
data supporting the recommendations suggest that their implementation
should provide for more efficient operations within DOD, the BRAC
Commission may wish to consider the basis for the group's assumptions
about military personnel reductions, because these have a significant
impact on the recommendations' annual recurring savings and the potential
benefits in relation to the investment costs for recommendations with
longer payback periods.

Military Personnel Reductions

Significant portions of the savings in three recommendations-combat
service support, air defense, and aviation logistics-are related to
military personnel reductions. These recommendations represent $217
million, or 92 percent of the Education and Training Joint Cross-Service
Group's projected net annual recurring savings. Our analysis indicates
that about $174 million of the net annual recurring savings is based on
eliminating over 2,000 military positions within the Army. However, the
Army does not plan to reduce its end strength by 2,000 in implementing
these actions. These projected revenues do not represent dollar savings
that can be readily reallocated to other accounts and applied to other
priorities such as modernization, an area typically cited as a potential
beneficiary of BRAC savings. Our analysis shows that without the savings
from the military

 Appendix VI Education and Training Joint Cross-Service Group Selection Process
                              and Recommendations

personnel reductions, the payback for the combat service support
recommendation increases to 35 years, and for both the air defense and
aviation logistics recommendations there would be no payback.

Extended Payback Periods	The group has proposed one recommendation that
has no expected payback period and two others that have payback periods
that exceed 10 years, far longer than the average payback typically
associated with recommendations in the 1995 BRAC round. The recommendation
to establish an integrated training center for the Joint Strike Fighter at
Eglin Air Force Base, Florida, has no expected payback period, one-time
cost of $199 million ($168 million is for military construction), and
annual recurring cost of $3.3 million. This recommendation calls for the
realignment of nearly 800 military positions-675 maintenance and 115
pilot-from five military installations to Eglin Air Force Base to train
entrylevel aviators and maintenance technicians from the Navy, Marine
Corps, and Air Force in how to operate and maintain the new Joint Strike
Fighter aircraft when produced and deployed. According to the chairman of
the flight training subgroup, the recommendation does not provide the
opportunity to generate savings through the consolidation and alignment of
similar personnel because it is a new mission. However, this
recommendation would establish a baseline program in a consolidated/joint
school with a curriculum that brings a joint perspective to the learning
process.

The two recommendations with payback periods greater than 10 years affect
the Army. For example, the recommendation to relocate the Army Prime Power
School from Fort Belvoir, Virginia to Fort Leonard Wood, Missouri, has a
16-year payback period, onetime cost of $6 million, and a 20-year net
present value savings of less than $1 million. According to the DOD BRAC
report, implementation of this recommendation consolidates engineer
courses at Fort Leonard Wood, since the common-core phase of engineer
courses are already taught at Fort Leonard Wood. Likewise, the
recommendation to realign Fort Eustis, Virginia by relocating the Aviation
Logistics School and consolidating it with the Aviation Center and School
at Fort Rucker, Alabama has a 13-year payback period, one-time cost of
$492.3 million, and a 20-year net present value savings of only $77.4
million. According to the DOD BRAC report, consolidating aviation
logistics training with the Aviation Center and School fosters
consistency, standardization, and training proficiency.

 Appendix VI Education and Training Joint Cross-Service Group Selection Process
                              and Recommendations

Proposals Eliminated from Consideration

The proposed recommendations do little to reduce the significant excess
capacity (see table 20) that was identified in undergraduate pilot
training for both fixed and rotary wing aircraft. The Education and
Training Joint Cross-Service group identified several scenarios to
consolidate undergraduate pilot training that could have enabled some base
closures, but the group was unable to get the military services to agree
to a joint solution. As a result, the Air Force made a proposal to realign
its undergraduate pilot training and consolidate its navigator training
with the Navy, which DOD adopted. However, the approved recommendation did
not include rotary wing flight training. According to the chairman of the
flight training subgroup, the capacity and military value analysis clearly
showed that sufficient space is available at Fort Rucker for the Navy
undergraduate rotary wing program to relocate from Naval Air Station
Whiting Field, Florida, to Fort Rucker with limited renovation or military
construction. However, the chairman noted that his group could not get the
Navy to agree to the consolidation because of the Navy's concerns over how
such actions would affect other training schedules, so it was not pursued.

The Education and Training Joint Cross-Service group also developed a
proposal to privatize graduate education that was conducted at the Naval
Postgraduate School at Monterey, California, and the Air Force Institute
of Technology at Wright-Patterson Air Force Base, Ohio. The group
estimated that the proposal would produce $14 million in 20-year savings,
with payback in 13 years, and enable the closure of the Monterey location.
However, the IEC removed this recommendation late in the process because
they believed that relying on the private sector to fulfill this
requirement is too risky. According to the Navy's Special Assistant for
BRAC, the Chief of Naval Operations did not want to lose the synergy and
interaction between U.S. and foreign students who attended the
postgraduate school, and there were questions over whether all
graduatelevel courses would be available at civilian institutions.

The group also developed a recommendation to consolidate all the military
services' senior war colleges at Fort McNair, Washington, D.C., making
them one college of the National Defense University. The group estimated
that the proposal would produce $213 million in 20-year savings, with
payback in 2 years. All of the military services voiced concerns about
this recommendation. The Air Force believed that this recommendation would
significantly degrade its Center of Excellence for Professional Military
Education that includes extensive curriculum for air centric studies
located at Maxwell Air Force Base, Alabama. The Navy believed that the
existing

Appendix VI Education and Training Joint Cross-Service Group Selection
Process and Recommendations

system already has joint educational forums to address executive-level
interchange, and it is unclear what would be gained by creating a single
senior war college. Finally, the Army opposed the recommendation because
it would move senior leaders and their families to the National Capital
Region for 10 months. Based on the services' concerns, the IEC rejected
the proposal. However, the group, with the Army's concurrence, developed a
recommendation to move the Army War College, Pennsylvania, to Fort
Leavenworth, Kansas, and consolidate it with the Army Command and General
Staff College at a single location. This proposal would have enabled the
closure of Carlisle Barracks in Pennsylvania, with projected 20-year
savings of $555 million and a 2-year payback period. However, the IEC
rejected this proposal because it wanted to maintain the proximity to
Washington, D.C. that provides access to key national and international
policy makers as well as senior military and civilian leaders.

Finally, the group developed eight scenarios to promote joint management
of the military services' training ranges. These options included
utilizing a joint national urban operations training center and
establishing three joint regional range coordination centers. The group
ultimately proposed one recommendation to establish three regional joint
range coordination centers, which it projected would have a 20-year cost
of $138 million and no payback. The ISG rejected this recommendation
because it deals with a program action as opposed to a BRAC-related issue.

Appendix VII

Headquarters and Support Activities Joint Cross-Service Group Selection
Process and Recommendations

The Headquarters and Support Activities Joint Cross-Service Group followed
the common analytical framework established by the Office of the Secretary
of Defense (OSD) for reviewing its functions and facilities. The group
produced 21 recommendations, each of which resulted in multiple closures
or realignments of activities, mostly from leased space onto military
bases intended to consolidate commands, reduce costs, and enhance force
protection. Nine other recommendations were referred to other joint
cross-service groups or military services for inclusion in their reports.
The group's 21 recommendations are projected to realize $9.5 billion in
net present value savings over 20 years. The payback period, or length of
time required for the savings to offset closure costs for the
recommendations discussed here, varied widely, from immediate to up to 16
years. We have identified some issues that suggest uncertainty about the
level of savings likely to be realized, which the BRAC Commission may want
to consider in its analysis of the proposed recommendations. The DOD
Inspector General and service audit agencies, which performed audits of
the data, concluded that the data were sufficiently reliable for use
during the BRAC process, but did raise issues of concern impacting some
recommendations.

Organization and Focus

The Headquarters and Support Activities Joint Cross-Service Group
comprised six senior-level principal members, representing each service,
the Office of the Secretary of Defense, and the Joint Chiefs of Staff. The
group was chaired by the Army Assistant Deputy Chief of Staff for
Programs, and principal members included the Commandant, Naval District
Washington; the Marine Corps Assistant Deputy Commandant for Manpower and
Reserve Affairs; the Administrative Assistant to the Secretary of the Air
Force; the Office of the Secretary of Defense Deputy Director for
Administration and Management; and the Chief of the Forces Division, Joint
Staff.1 The group analyzed common headquarters-, administration-, and
business-related functions across DOD, covering the military services, and
defense agencies and activities. The group's objectives were to

o  improve jointness;

o  eliminate redundancy, duplication, and excess capacity;

1 At OSD, the Infrastructure Steering Group (ISG) and the Infrastructure
Executive Council (IEC) provided overall coordination and direction to the
DOD-wide process.

                                  Appendix VII
                   Headquarters and Support Activities Joint
                   Cross-Service Group Selection Process and
                                Recommendations

o  enhance force protection;

o  utilize best business practices;

o  increase effectiveness, efficiency, and interoperability; and

o  reduce costs.

Framework for Analysis

The group organized itself into three subgroups: (1) major administrative
and headquarters activities, (2) geographic clusters and functional, and
(3) mobilization. The major administrative and headquarters activities
subgroup focus included headquarters activities in leased and DOD-owned
space within and outside a 100-mile radius of the Pentagon, combatant,
service component, and supporting commands, and reserve and recruiting
headquarters. The geographic clusters and functional subgroup examined
installation management within geographic clusters,2 Defense Finance and
Accounting Services headquarters and field offices, correctional
facilities, and civilian and military personnel centers. The mobilization
subgroup looked at the potential for joint mobilization sites. Capacity
analysis identified the current inventory of administrative space, while
the military value analysis became the starting point for developing
recommendations as they applied to the four military value selection
criteria. The DOD Inspector General and service audit agencies performed
an important role in ensuring the accuracy of data used in these analyses
through extensive audits of data gathered at various locations.

Capacity Analysis	To form the basis for its analyses, the group developed
metrics in each of the functional areas to measure capacity and
subsequently collected certified data from the military services and
defense agencies and activities. In most cases, the group used a single
metric, a standard factor of 200 gross square feet per person in analyzing
existing administrative space requirements.3 The group also used fiscal
year 2003 inmate population and current and maximum operational capacities
for

2 These are installations having shared boundaries or that are located in
proximity to each other.

3 The group used 200 gross square feet as the standard factor as a
compromise to account for the different standards used by each of the
military services and defense agencies.

                                  Appendix VII
                   Headquarters and Support Activities Joint
                   Cross-Service Group Selection Process and
                                Recommendations

correctional facilities, and it used fiscal year 2004 personnel processing
numbers and peak processing capacities at military installations serving
as reserve component mobilization sites to estimate mobilization excess
capacity figures.

The capacity analysis identified excess capacity across all functions
analyzed-even when surge requirements were considered. As shown in table
23, excess capacity ranged from 14 percent to 87 percent across various
capacity metrics in functional categories after applying a surge factor to
figures for major administrative and headquarters installations and
facilities and correctional facilities. The table provides the amount of
the aggregate excess capacity for each of the functional categories;
however, the amount of excess capacity varies by individual installation
and activity.

Table 23: Excess Capacity Identified by the Headquarters and Support Activities
                           Joint Cross-Service Group

                          Figures in gross square feet

                                  Maximum                               
                                                                 Excess Percentage 
                                potential                                       of 
Subgroup       Category       capacity  Current    Surge    capacity     excess 
                                            usage                         capacity 
    Major      Installations                                                    22 
administrative                112,006,087 87,566,988 362,760 24,076,339 
     and                                                                           
 headquarters    Activities    26,576,615 20,269,800   6,350  6,300,465         24
  activities                                                            
  Geographic    Installation                               0            
clusters                     9,381,190  8,009,278          1,371,912 
and functional   management                                             
                  Defense                                  0            
                Finance and     3,245,808  2,530,240            715,568 
                 Accounting                                             
                  Service                                               
                Correctional        2,975      2,141     410        424 
                 facilities                                             
                  Civilian      1,278,040    969,000       0    309,040 
                 personnel                                              
                  centers                                               
                  Military      2,293,495  1,748,400       0    545,095 
                 personnel                                              
                  centers                                               
 Mobilization  Mobilization/      106,929     13,592       0     93,337         87 
               demobilization                                           

Source: Headquarters and Support Activities Joint Cross-Service Group.

Note: Group officials noted the high percentage of excess capacity for
mobilization is due to differences in the required maximum potential
capacity and the different service standards for mobilizations.

In calculating excess capacity estimates for each of the eight categories,
the group analyzed the data call responses pertaining to current capacity,
maximum potential capacity, current usage, and space required for surge,

                                  Appendix VII
                   Headquarters and Support Activities Joint
                   Cross-Service Group Selection Process and
                                Recommendations

using a standard factor of 200 gross square feet per employee. Subtracting
current usage and surge space requirements from maximum potential capacity
resulted in the excess capacity estimates. The group used a variety of
approaches to consider surge requirements. For example, the major
administrative and headquarters activities subgroup determined surge
requirements through specific data call questions and then used these
requirements in the capacity analysis in terms of requirement and space
evaluations. The correctional facilities function within the geographic
clusters and functional subgroup considered surge as a function of demand
against maximum potential capacity. At the same time, the geographic
clusters and functional subgroup determined that military personnel
centers had been operating in a surge mode for the past several years and
did not require additional surge capacity to be retained. The group did
not determine the aggregate impact its recommendations had on reducing
excess capacity.

Military Value Analysis 	The group's military value analysis was directly
linked to the four military value selection criteria, as required by the
BRAC legislation. The group assigned military values to 25 civilian
personnel offices, 10 military personnel centers, 17 correctional
facilities, 26 Defense Finance and Accounting Service sites, 65
installation management sites, 334 major administrative and headquarters
installations and activities, and 66 mobilization sites. Each functional
group developed weighted values for each selected criteria by first asking
each group member to assess weights across the military value selection
criterion, ranking them from highest to lowest in importance to military
value. Once the rankings were determined, the weights generated for each
group member were compared and, if they were close, the weights were
adopted. If not, the group discussed the differences and reached
agreement. Table 24 shows the various weights assigned to each of the four
military value selection criteria.

Appendix VII
Headquarters and Support Activities Joint
Cross-Service Group Selection Process and
Recommendations

Table 24: Headquarters and Support Activities Joint Cross-Service Group
Military Value Criteria Weights

                             Figures in percentages

Major administrative Geographic and headquarters clusters and Military
value criteria activities functionala Mobilization

                      1. The current and future mission     40             37 
                         capabilities and the impact on            
                     operational readiness of the total            
                    force of the Department of Defense,            
                 including impact on joint warfighting,            
                               training, and readiness.            

                   2. The availability and condition of     44             20 
                       land, facilities, and associated            
                     airspace (including training areas            
                       suitable for maneuver by ground,            
                      naval, or air forces throughout a            
                 diversity of climate and terrain areas            
                   and staging areas for the use of the            
                       Armed Forces in homeland defense            
                         missions) at both existing and            
                         potential receiving locations.            

                         3. The ability to accommodate     11              20 
                 contingency, mobilization, surge, and             
                    future total force requirements at             
                 both existing and potential receiving             
                   locations to support operations and             
                                             training.             

4. The cost of operations and the 5 24 manpower implications.

                               Total 100 100b 100

Source: DOD and Headquarters and Support Activities Joint Cross-Service
Group.

aThe geographic clusters and functional subgroup military value scorings
are a cumulative average of its five functional areas, including civilian
personnel, military personnel, correctional facilities, Defense Finance
and Accounting Service, and geographic clusters. The system of weights
provided a basis for assigning relative value to data collected and
tabulated across each military value dimension.

bIndividual entries do not sum to total because of rounding.

The group's assessment of military value included development of
attributes (characteristics, facts, etc.), metrics or measures, and data
call questions for each of the three subgroups. Figure 14 demonstrates an
example of how attributes, metrics, and data call questions were linked
back to the BRAC military value selection criteria for the major
administrative and headquarters activities subgroup.

                                  Appendix VII
                   Headquarters and Support Activities Joint
                   Cross-Service Group Selection Process and
                                Recommendations

Figure 14: Selected Attributes, Metrics, and Data Questions Used to Assess
Military Value of Major Administrative and Headquarters Activities

Source: GAO analysis of Headquarters and Support Activities Joint
Cross-Service Group data.

aThe BRAC military value criteria are the first four BRAC selection
criteria.

bMilitary value attributes are characteristics of each criterion. The
major administrative and headquarters activities subgroup used a total of
14 military value attributes.

cMilitary value metrics are measures for the attributes. The major
administrative and headquarters activities subgroup used a total of 20
military value metrics.

dThe major administrative and headquarters activities subgroup used a
total of 31 data call questions.

The geographic clusters and functional subgroup and the mobilization
subgroup used similar approaches of attributes, metrics, and data call
questions to link the analysis back to the military value selection
criteria. For example, the geographic clusters and functional, and major
administive and headquarters subgroups developed metrics and data call
questions addressing force protection issues.

                                  Appendix VII
                   Headquarters and Support Activities Joint
                   Cross-Service Group Selection Process and
                                Recommendations

Using mostly certified data, the headquarters group examined the
capabilities of each function from questions developed to rank activities
from most valued to least valued. Exceptions occurred where military value
responses were slow in arriving, contained obvious errors, or were
incomplete, and in these cases judgment-based data were used. For example,
in about 30 cases, activities in leased space did not respond to
particular data call questions addressed to the leased space building
manager nor did they identify what entity managed the building. After
numerous follow-ups with the activities and meetings with representatives
of the Washington Headquarters Service and Army Corps of Engineers-
property agents for DOD-the group decided to use judgment-based data
derived from functional subject matter experts, in consultation with the
military departments and defense agencies. In an October 2004 memorandum
to the Infrastructure Steering Group describing military value scoring
plan changes, the Headquarters and Support Activities Joint Cross-Service
Group concluded that based on an analysis of the effect of the missing,
wrong, and incomplete data on proposals, there were some data issues that
could affect the generation and comparison of proposals by the group
members. However, improvements to the data occurred over time, and as of
May 2005, when the military value analysis was completed, the group
reported that a vast majority of its data were certified. We were told by
a group operations research analyst that 99 percent of the analysis was
determined by certified data and less than 1 percent by judgmentbased
data.

DOD Inspector General's and Service Audit Agencies' Role in the Process

The DOD Inspector General and service audit agencies reviewed the data and
processes used by each subgroup to develop their recommendations; the
military service audit agencies reviewed data inputs from the services,
and the Inspector General reviewed data inputs from defense agencies and
activities. Their objectives were to validate the data and the adequacy of
the supporting documentation. The process for detecting and correcting
data errors was quite lengthy and challenging. Through their audits of the
data collected from field activities during the process, audit agencies
notified the group as data discrepancies were discovered so that follow-on
corrective actions could be initiated. The military service audit agencies
concluded that the information was sufficiently reliable for its intended
purpose. Assessments by the DOD Inspector General's office of the data it
reviewed were more mixed. In its June 10, 2005 draft report on the
Headquarters and Support Activities Joint Cross-Service Group's data

Appendix VII
Headquarters and Support Activities Joint
Cross-Service Group Selection Process and
Recommendations

integrity and internal control process for BRAC,4 the DOD Inspector
General's office concluded that after corrections were made, the group
generally used certified data and created an adequate audit trail for its
capacity, military value, and cost of base realignment actions. However,
the Inspector General's office raised issues involving estimated one-time
savings associated with vacating leased space and consistency in rounding
to estimate personnel savings. According to group officials, the Inspector
General's issues were discussed with group leadership, and they decided in
deliberative session that the approaches taken by the group were the most
fair and accurate approaches available and should be retained.

Our analysis indicates that the two issues identified by the Inspector
General would reduce projected savings. Our analysis shows that if the
one-time cost savings associated with antiterrorism and force protection
are excluded, the 20-year net present value savings would be reduced by
$268.4 million, the payback periods for 7 of the 15 affected
recommendations would be extended by 1 year, and 3 years for one
recommendation. Also, for the two recommendations5 identified by the
Inspector General as using abnormal rounding techniques6 to estimate
personnel reductions, the projected 20-year net present value savings in
one case would be reduced from $13.5 million to a $749,000 cost, and for
the other recommendation, the 20-year net present value savings drops from
approximately $4.9 million to $ 2.6 million.

4 Department of Defense, Office of Inspector General Audit Report,
Headquarters and Support Activities Joint Cross-Service Group Data
Integrity and Internal Control Processes for Base Realignment and Closure
2005, Report No. D2003-D000CG-0135.000 (Arlington, Va.: forthcoming).

5 The recommendations are to co-locate defense and military adjudication
activities at Fort Meade, Maryland, and to consolidate Defense Commissary
Agency offices at Fort Lee, Virginia.

6 A DOD Inspector General representative told us that the group rounded
all personnel reductions to the next highest number, rather than the
normal practice of rounding up only when the calculated number was .5 or
higher.

                                  Appendix VII
                   Headquarters and Support Activities Joint
                   Cross-Service Group Selection Process and
                                Recommendations

Identification and Assessment of Alternate Proposals and Selection of
Recommendations

The Headquarters and Support Activities Joint Cross-Service Group
developed proposals without receiving all the data they had requested from
numerous activities. As such, the group relied on transformational goals
and military judgment to develop its initial proposals. The group also
used certified data to support or reject its proposals, data which the DOD
Inspector General audited for accuracy. The group used the optimization
model on a limited basis for a few functional areas because potential for
those functional realignment possibilities was generally slight.

The following transformation options helped guide the group in developing
initial proposals:

o 	Consolidate management at installations with shared boundaries and in
geographic clusters.

o  Consolidate or co-locate civilian and military personnel offices.

o 	Consolidate Defense Finance and Accounting Service central and field
offices.

o 	Establish and consolidate mobilization sites and establish joint
deployment processing sites.

o 	Justify locations for headquarters, commands, and activities within 100
miles of the Pentagon.

o  Eliminate leased space.

o 	Consolidate multi-location headquarters at single locations, and
eliminate stand-alone headquarters.

o  Consolidate corrections facilities.

o 	Co-locate reserve and active component recruiting headquarters, and
eliminate reserve force management organizations.

o 	Regionalize common headquarters, administrative, and business-related
common support activities.

The group initially developed 117 proposals, based on these
transformational options and military judgment, to include alternative

                                  Appendix VII
                   Headquarters and Support Activities Joint
                   Cross-Service Group Selection Process and
                                Recommendations

proposals being requested by the Infrastructure Steering Group (ISG). The
group settled on 50 recommendations that were initially forwarded to the
ISG. Seventeen of them were subsequently consolidated with other
recommendations; 2 were rejected by the ISG and one by the Infrastructure
Executive Council. Also, 9 recommendations were transferred to other
cross-service groups or military departments for inclusion in their
reports.7 That left 21 recommendations that the group addressed in its
report and accordingly are addressed in this appendix.

Recommendations 	The Headquarters and Support Activities Joint
Cross-Service Group projects that its 21 recommendations will produce a
20-year net present

Approved by DOD	value savings of $9.5 billion, net annual recurring
savings of about $914 million, and payback, or length of time required for
the savings to offset closure costs for the recommendations, that varies
widely from immediate to up to 16 years. Table 25 provides a summary of
the financial aspects of the group's recommendations.

Table 25: Financial Aspects of the Headquarters and Support Activities
Joint Cross-Service Group's Recommendations

                 Fiscal year 2005 constant dollars in millions

                                                      Net                  20-year 
                                                      annual              
                        DOD   One-time Net                                     net 
                      report           implementation recurring   Payback  present 
 Recommended actions   page    (costs)        (costs)   savings    period    value 
                                             savingsa                     savingsb 
    Joint basing      H&SA-41 ($ 50.6)         $601.3    $183.8 immediate        $ 
                                                                           2,342.5 
Consolidate/co-locate                                                     
     active and                                                           
reserve personnel and                                                     
     recruiting                                                           
centers for Army and  H&SA-33  (119.3)          463.0     152.8 immediate  1,913.4 
      Air Force                                                           
 Defense Finance and                                                      
     Accounting                                                           
       Service        H&SA-37  (282.1)          158.1     120.5 immediate  1,313.8 
     Consolidate                                                          
transportation                                                         
       command                                                            
     components       H&SA-31  (101.8)          339.3      99.3 immediate  1,278.2 
 Consolidate Defense                                                      
     Information                                                          
Systems Agency     H&SA-27  (220.0)        (102.1)      59.4   2 years    491.2 

7 The group's recommendations transferred to the military departments
allowed the departments to recommend closure of Fort Monroe, Virginia,
Fort McPherson, Georgia, Naval Supply Activity New Orleans, Louisiana,
Marine Corps Support Center Kansas City, Missouri, and Brooks City-Base,
Texas.

                                  Appendix VII
                   Headquarters and Support Activities Joint
                   Cross-Service Group Selection Process and
                                Recommendations

(Continued From Previous Page)

                 Fiscal year 2005 constant dollars in millions

                                                      Net             20-year 
                                                    annual           
                    DOD    One-time Net                                   net 
                   report           implementation recurring Payback  present 
    Recommended     page    (costs)        (costs)  savings   period    value 
      actions                             savingsa                   savingsb 
     Co-locate                                                       
    Missile and                                                      
Space Defense                                                     
      agencies    H&SA-15   (178.2)           13.0      36.1  1 year    359.1 
     Co-locate                                                       
miscellaneous                                                     
    Army leased                                                      
     locations    H&SA-10    (44.1)           59.5      27.8  1 year    322.0 
     Co-locate                                                       
miscellaneous                                                     
     Air Force                                                       
       leased                                                        
locations and                                                     
National Guard                                                    
    Headquarters                                                              
       leased      H&SA-3    (90.5)         (10.8)      30.8  1 year    308.3
     locations                                                       
     Co-locate                                                       
miscellaneous                                                     
        OSD,                                                         
      defense                                                        
    agency, and                                                      
field activity                                                    
       leased     H&SA-12   (539.0)        (376.9)      63.3 9 years    257.6 
     locations                                                       
    Consolidate                                                      
      civilian                                                       
     personnel                                                       
      offices                                                        
       within                                                        
      military                                                       
department and                                                    
      defense     H&SA-19                               24.4            196.7 
      agencies               (97.5)         (46.4)           4 years 

Co-locate military department
investigation agencies with DOD
Counterintelligence and Security
Agency H&SA-8 (174.0) (88.0) 26.3 7 years 172.7

      Relocate miscellaneous                                            
            Department                                                  
of the Navy leased locations  H&SA-49 (61.9)   (12.8) 18.0  1 year   164.0 
     Consolidate Army Test and                                          
            Evaluation                                                  
       Command Headquarters      H&SA-18  (7.1)     44.0  8.7 immediate 125.7 
    Relocate Army headquarters                                          
             and field                                                  
       operating activities      H&SA-46 (199.9) (111.8) 23.9 10 years  122.9 
         Consolidate media                                              
        organizations into                                              
     new agency for media and                                           
           publications          H&SA-30 (42.0)    (2.9)  9.5  4 years  
     Create joint mobilization   H&SA-35            30.9  0.8 immediate 
               sites                      (0.1)                         

Co-locate Navy Education and
Training Command and Navy
Education and Training Professional
Development and Technology Center H&SA-17 (33.3) (23.6) 3.7 10 years

Co-locate defense and                                             
          military                                                   
         department                                                           
        adjudication      H&SA-5    (67.1)    (47.5)    5.7 13 years     11.3
         activities                                                  
     Relocate Air Force                                              
       Real Property                                                 
           Agency         H&SA-44   (4.5)      (0.9)    0.9 5 years       7.9 
    Consolidate Defense                                              
         Commissary                                                  
     Agency Eastern and                                              
         Midwestern                                                  
Regions, and Hopewell, H&SA-26   (47.2)    (35.4)    3.9 14 years      4.9 
        VA, offices                                                  
        Consolidate                                                  
        correctional                                                 
      facilities into                                                
       joint regional                                                         
        correctional      H&SA-22  (178.8)   (149.4)   14.6 16 years      2.3
         facilities                                                  
           Total                  ($2,539.0)  $700.6 $914.2          $9,535.8 

                       Source: GAO analysis of DOD data.

                                  Appendix VII
                   Headquarters and Support Activities Joint
                   Cross-Service Group Selection Process and
                                Recommendations

Note: After DOD released its BRAC recommendations on May 13, 2005, the
Headquarters and Support Activities Joint Cross-Service Group discovered
errors in cost and savings data for 6 of its 21 recommendations. At the
time of this report, the impact resulting from these recommendations
increased the 20-year net present value savings by $34.6 million. For 3 of
the recommendations, 20year net present value savings increased, while the
remaining 3 decreased. The issue was still in the process of being
corrected at the time of this report.

aThis represents net costs or savings within the 6-year implementation
period required to implement BRAC recommendations.

bDOD used a 2.8 percent discount rate to calculate net present value.

In total, the group estimates that its recommendations will require a
total investment of $2.5 billion, primarily for new military construction
and moving personnel from leased space onto military bases, and will
ultimately result in net annual recurring savings of $914.2 million. Our
analysis indicates that about 92 percent of the annual recurring savings
results from reductions in military and civilian employment levels (about
$270 million, and about $267 million respectively) and the elimination of
future lease payments for administrative office space ($300 million).
Eighteen of the group's recommendations are expected to realize savings
within 10 years of completing the BRAC realignment and closure actions,
while 3 have a payback period greater than 10 years.

Issues Identified with Approved Recommendations

Time did not permit us to assess the operational impact of each
recommendation, particularly where operations are proposed for
consolidation across multiple locations outside a single geographic area.
However, we offer a number of broad-based observations about the proposed
recommendations. While available data supporting the recommendations
suggest that their implementation should provide for more efficient
operations within DOD, the BRAC Commission may wish to consider the basis
of the group's assumptions for personnel reductions because they have a
significant impact on the recommendations' savings; the assumptions
regarding vacating leased facilities because including antiterrorism and
force protection savings also has an impact on the recommendations'
savings; challenges to implementing joint basing; cases where realignment
actions with long payback periods were combined with actions with shorter
durations; stand-alone actions where the payback period exceeded 10 years;
and proposals eliminated prior to release of the final recommendations.

Personnel Reductions	Approximately $537 million, or about 59 percent, of
the group's projected net annual recurring savings are based on reductions
in the number of

Appendix VII
Headquarters and Support Activities Joint
Cross-Service Group Selection Process and
Recommendations

military and civilian personnel eliminated as a result of the BRAC
actions.8 The process used raises questions about the projected savings.
The group initially used generic savings factors to estimate the number of
personnel positions that could be eliminated when organizations were
co-located or consolidated. These factors were developed on the basis of
comments from subject matter experts and research of various databases
available through the Pentagon library or the Internet. The group found
that personnel reductions from 14 percent to 30 percent resulted from
consolidation of organizations and 7 percent to 15 percent when they were
co-located. The group adopted these personnel savings factors because the
information it did collect on the number of personnel performing common
support functions within the affected organizations could not be used and
believed it did not have sufficient time to perform more precise manpower
studies. The group used these savings factors consistently as starting
points in negotiating the number of personnel reductions with the military
departments and defense agencies and activities. In most cases the
negotiated estimates were accepted, but in some cases the group imposed a
personnel reduction percentage when negotiations failed. For example, in
analyzing the costs and savings associated with relocating the Army
Materiel Command from temporary lease space on Fort Belvoir, Virginia, to
Redstone Arsenal, Alabama, the group leadership decided to impose a 7
percent personnel elimination based on expected economies of scale from
co-locating the command with one of its major subordinate activities. Our
analysis showed that the percentage factor used to estimate personnel
reductions for all recommendations ranged from zero percent to about 42
percent.

A separate area of concern involves savings reported for military
personnel. Our analysis indicates that the group's recommendations propose
to eliminate 2,479 military positions, which would result in about $270
million in net annual recurring savings. However, service officials
indicate that they do not plan to reduce their end-strength based on these
proposed eliminations but rather reallocate these positions elsewhere
within the force structure. Since these military personnel will be
assigned elsewhere rather than removed from the force structure, the
projected savings do not represent dollars that can be readily allocated
outside the personnel accounts to other purposes.

8 Approximately $270 million, of the projected net annual recurring
savings are from the elimination of military personnel and approximately
$267 million from the elimination of civilian employees.

                                  Appendix VII
                   Headquarters and Support Activities Joint
                   Cross-Service Group Selection Process and
                                Recommendations

Leased Space	Fifteen of the group's recommendations include a one-time
savings of over $300 million from moving activities from leased space onto
military installations. For example, these recommendations, if approved,
would reduce total DOD leased space within the National Capital Region9
from 8.3 million square feet to about 1.7 million square feet, or by 80
percent. While our prior work generally supports the premise that leased
property is more expensive than government owned property, the
recommendations related to vacating leased space also raises questions
about a limitation in projected savings and impact on local communities.

The one-time cost savings represents costs expected to be avoided in the
future by moving from leased facilities onto government owned and
protected facilities rather than upgrading existing leased space to meet
DOD's antiterrorism and force protection standards.10 According to a DOD
official, the department put together a task force after the June 1996
Khobar Tower bombing incident in Dhahran, Saudi Arabia, of mostly
engineers to develop minimum force protection standards for all
DODoccupied locations. The official also stated that application of the
standards in BRAC was not the result of a threat or vulnerability
assessment of the affected facilities. The Pentagon Force Protection
Agency will shortly begin a 10-month antiterrorism and force protection
vulnerability assessment of about 60 DOD-occupied leased buildings in the
National Capital Region. This assessment will provide DOD with information
to estimate the costs and feasibility of upgrading leased facilities to
the antiterrorism and force protection standards. The force protection
standards for leased buildings apply only where DOD personnel occupy at
least 25 percent of the net interior usable area; only to the portion of
the building occupied by DOD personnel; and to all new leases executed on
or after October 1, 2005, and to leases renewed or extended on or after
October 1, 2009. Initially, the group prepared military value data call
questions that could determine whether a leased location met the force
protection requirements. However, group officals stated that most of these
questions were discarded because of inconsistencies in how the questions

9 The National Capital Region includes Washington, D.C.; the Maryland
counties of Montgomery and Prince George's; and the Virginia counties of
Fairfax, Loudoun, and Prince William and the City of Alexandria, Virginia.

10 Unified Facilities Criteria: DOD Minimum Antiterrorism Standards for
Buildings (UFC 4010-01, 8 Oct. 2003).

                                  Appendix VII
                   Headquarters and Support Activities Joint
                   Cross-Service Group Selection Process and
                                Recommendations

were answered except for the percentage of DOD personnel occupying
buildings.

The group applied the cost avoidance factor consistently to all leased
locations but did not collect data that would indicate whether existing
leases met the standards, which could possibly result in application of
the factor at locations meeting the force protection requirements. For
example, the group applied over $2 million in one-time force protection
cost avoidance to relocate a Navy human resources service center from the
Stennis Space Center, Mississippi, to the Naval Support Activity,
Pennsylvania, even though the Stennis Space Center may be as secure as any
military installation. If these one-time savings, as shown in the final
recommendations forwarded to the BRAC Commission, are not considered in
the cost and savings analysis, our analysis shows that the projected
20year net present value savings decrease by 3 percent ($268.4 million),
the payback period increases by 1 year for 7 of 15 recommendations, and by
3 years for one recommendation as shown in table 26. After the final
recommendations were released to the BRAC Commission, the group found
errors in some recommendations, affecting one-time estimated savings and
other costs and savings, which were still in the process of being
corrected at the time of this report.

Table 26: Impact of One-time Antiterrorism and Force Protection Savings on
                     Recommendations Involving Leased Space

                 Fiscal year 2005 constant dollars in millions

  GAO analysis without antiterrorism and force protection savings DOD proposed
                                 recommendation

          20-year net present value savings 20-year net present value savings

Payback period

Payback period

                               Recommended action

Consolidate transportation command $ 1,278.2 immediate $ 1,273.4 immediate 
               components                                           
    Consolidate/co-locate active and            immediate           immediate 
    reserve personnel and recruiting   1,909.0a             1,880.7 
     centers for Army and Air Force                                 
       Consolidate Army Test and          125.7 immediate     122.8 immediate 
    Evaluation Command Headquarters                                 
      Co-locate Missile and Space         359.1  1 year       282.6   4 years 
            Defense agencies                                        
      Co-locate miscellaneous Army        322.0  1 year       300.3   2 years 
            leased locations                                        
Co-locate miscellaneous Air Force                                          
     leased locations and National       308.2a               294.7 
                 Guard                           1 year               2 years
     Headquarters leased locations                                  
Relocate miscellaneous Department      164.0               151.2           
      of the Navy leased locations               1 year               2 years

                                  Appendix VII
                   Headquarters and Support Activities Joint
                   Cross-Service Group Selection Process and
                                Recommendations

(Continued From Previous Page)

                 Fiscal year 2005 constant dollars in millions

  GAO analysis without antiterrorism and force protection savings DOD proposed
                                 recommendation

          20-year net present value savings 20-year net present value savings

Payback period

Payback period

                               Recommended action

       Co-locate military department         172.7 7 years     161.6  7 years 
      investigation agencies with DOD                                
      Counterintelligence and Security                               
                   Agency                                            
      Consolidate Defense Information        491.2 2 years     475.1  3 years 
               Systems Agency                                        
Consolidate civilian personnel offices    196.7             189.6          
       within military department and              4 years            4 years
              defense agencies                                       
    Consolidate media organizations into      89.0              86.5          
          new agency for media and                 4 years            4 years
                publications                                         
    Co-locate miscellaneous OSD, defense     257.6             200.1          
     agency, and field activity leased             9 years           10 years
                 locations                                           
    Relocate Army headquarters and field     122.9 10 years    115.4 10 years 
            operating activities                                     
Consolidate Defense Commissary Agency       4.9               2.3          
           Eastern and Midwestern                  14 years          15 years
     Regions, and Hopewell, VA, offices                              
Co-locate defense/military department     13.5a 13 years     10.0 14 years 
          adjudication activities                                    
                   Total                  $5,814.7          $5,546.3 
                 Difference                                   $268.4 

Source: GAO analysis of DOD data.

aThe 20-year net present value savings for these proposed recommendations
differ from the amount in the final BRAC report because of errors found in
the COBRA reports after release of the final BRAC report.

Furthermore, four of the Headquarters and Support Activities Joint
Cross-Service Group's recommendations involve moving personnel from leased
space to Fort Belvoir, Virginia, mostly at the engineering proving ground,
increasing Fort Belvoir's population by about 10,700.11 The
recommendations include military construction projects to build facilities
for these personnel on Fort Belvoir. In addition, the recommendations
include a $55 million Army estimate to improve roads and other
infrastructure in the area surrounding the fort. However, it is uncertain
at this time whether this will be sufficient to fully support the impact
on the surrounding community's infrastructure, or the likelihood that
federal assistance is likely to be sought by local governments to help
communities

11 The other joint cross-service groups are also proposing to move about
9,600 personnel to Fort Belvoir for a total of over 20,300 personnel.

                                  Appendix VII
                   Headquarters and Support Activities Joint
                   Cross-Service Group Selection Process and
                                Recommendations

reduce the impact-costs that will have the effect of increasing one-time
costs and offsetting short-term savings from the recommendations.

Implementation Challenges	While the proposal to create joint bases by
consolidating common installation management functions is projected to
create greater efficiencies, our prior work suggests that implementation
of these actions may prove challenging. The joint-basing recommendation
involves one service being responsible for various installation management
support functions12 at bases that share a common boundary or are in
proximity to one another. For example, the Army would be the executive
agent for Fort Lewis, Washington, and McChord Air Force Base, Washington,
combined as Joint Base Lewis-McChord. However, as evident from our recent
visit to both installations and discussions with base officials, concerns
over obstacles such as seeking efficiencies at the expense of the mission,
could jeopardize a smooth and successful implementation of the
recommendation. Further, Air Force officials stated that most military
personnel at McChord are mission critical and deployable, increasing the
difficulty to identify possible Air Force military personnel reductions.
The group projects 20-year net present value savings of about $2.3
billion, with net annual recurring savings of about $184 million. More
than 90 percent of the recurring savings reported represent military (54
percent) and civilian (37 percent) personnel reductions. The group applied
personnel reductions ranging from 1 to 10 percent for each of the 12
locations included in the joint basing recommendation. The actual
percentage used for each location was negotiated between the group and the
military departments based on the size of base populations and the kind of
services provided.

In our June 2005 report13 we noted that DOD and the military services'
ability to forecast base operations support requirements and funding needs
has been hindered by the lack of a common terminology for defining base

12 The functions include such activities as real property management and
maintenance, utilities, housing, emergency services, environmental
services, base security, reserve component support, resource management,
procurement, personal property management, transportation, equipment
maintenance, retail supply, base communications, audio/visual services,
personnel and professional support, personnel services, food services,
laundry services, education services, personal and family services,
recreation, military exchange operations, airfield operations, garrison
operations, internal review, inspector general, and strategic planning.

13 GAO, Defense Infrastructure: Issues Need to Be Addressed in Managing
and Funding Base Operations and Facilities Support, GAO-05-556
(Washington, D.C.: June 15, 2005).

                                  Appendix VII
                   Headquarters and Support Activities Joint
                   Cross-Service Group Selection Process and
                                Recommendations

support functions, as well as by the lack of a mature analytic process for
developing base support requirements. We also reported challenges in
maintaining adequate funding to meet base operating support requirements
and facility upkeep. We concluded that until such problems are resolved,
DOD will not have in place the management and oversight framework needed
for identifying total base support requirements and ensuring adequate
delivery of services, particularly in a joint environment. In its comments
to a draft of our June report, DOD indicated that it expects to release a
new facilities operation model by December 1, 2005, and use it to develop
the fiscal year 2008 program and budget. DOD stated that it is also
conducting a cross-department initiative to develop definitions for the
common delivery of installation services and expects to complete this
effort by December 2005. However, regarding modeling efforts, a Senior
Joint Basing Group14 official expressed doubt during our review whether
there would be a single funding model because base operating support, as
it currently exists, has too many diverse activities to model. He
indicated that it is more likely that a suite of tools will evolve over
time.

Bundling Lessens Visibility of Costs

The headquarters group consolidated some recommendations with more than
10-year payback periods, far longer than typical payback periods in the
1995 BRAC round, with other proposals having shorter returns on
investment. In total, 8 of the 21 final recommendations were actually
packages that consolidated two or more recommendations approved by the
joint cross-service group as stand-alone candidate recommendations. We
found that in 7 instances, the more than 10-year payback periods of
initially stand-alone proposals tended to be masked after they were
combined in such packages. For example, the group developed a proposal to
move the Army Materiel Command from Fort Belvoir, Virginia, to Redstone
Arsenal, Alabama, which showed a 20-year net present cost and a 100-year
payback period by not having to spend about $71 million to construct a
permanent facility for the headquarters at Fort Belvoir. Had the
construction savings been included in the recommendation, the payback
period would have been 32 years. Concurrently, the group developed a
separate proposal to relocate various Army offices from leased and
government-owned office space mostly onto Fort Sam Houston, Texas, which
would result in a 20year net present value savings of about $277.4 million
and a 3-year payback period. The group decided to combine these two
stand-alone proposals so

14 In late 2004, a Senior Joint Basing Group was created by DOD to address
installation management issues at joint bases.

                                  Appendix VII
                   Headquarters and Support Activities Joint
                   Cross-Service Group Selection Process and
                                Recommendations

that all Army headquarters related activities were addressed in one
recommendation with an estimated 20-year net present value savings of
about $123 million with a 10-year payback.

Extended Payback Periods	The group proposed three recommendations that
have an estimated payback period exceeding 10 years and one-time costs for
implementation that greatly exceeds the expected 20-year net present value
savings. The cost, savings, and expected benefits for these
recommendations are described below:

o 	The recommendation to co-locate military department and DOD security
clearance adjudication and appeals activities to Fort Meade, Maryland, has
an estimated payback of 13 years, one-time cost exceeding $67 million, and
20-year net present value savings of only $11.3 million. According to the
DOD final BRAC report, implementation of this recommendation would
co-locate adjudication activities, reduce lease costs, and enhance
security.

o 	The recommendation to consolidate the Defense Commissary Agency Eastern
and Midwestern regions and a leased site in Hopewell, Virginia, to Fort
Lee, Virginia, has an estimated 14-year payback period, one-time cost
exceeding $47 million, and 20-year net present value savings of only $4.9
million. According to the DOD BRAC report, implementation of this
recommendation would consolidate headquarters operations at single
locations, enhance security, and reduce lease costs.

o 	The recommendation to establish joint regional correctional facilities
has an estimated 16-year payback period, one-time cost of almost $179
million, and 20-year net present value savings of only $2.3 million. For
example, the recommendation would establish the Midwest Joint Regional
Correctional Facility by relocating correctional functions currently
located at Lackland Air Force Base, Texas; Fort Knox, Kentucky; and Fort
Sill, Oklahoma, to Fort Leavenworth, Kansas. According to the DOD BRAC
report, implementation of this recommendation would improve jointness,
centralize corrections training, and eliminate or significantly reduce old
inefficient facilities.

Proposals Eliminated from Three recommendations were initially approved by
the group; two were

Consideration	later rejected by the ISG and another by the IEC. The ISG
rejected the recommendation to relocate U.S. Southern Command, Miami,
Florida, from

Appendix VII
Headquarters and Support Activities Joint
Cross-Service Group Selection Process and
Recommendations

its leased space to a state-owned leased space also in Miami with no
explanation. Group officials stated the ISG rejected the U.S. Southern
Command recommendation because costs associated with the relocation were
too high. The ISG also rejected the relocation of U.S. Army Pacific
Headquarters from Fort Shafter, Hawaii, to Pearl Harbor, Hawaii, because
of Pacific Command Combatant Commander and the Army concerns regarding
future requirements of U.S. Army Pacific Headquarters. The recommendation
rejected by the IEC to co-locate military department and DOD medical
activities to the National Medical Center, Bethesda, Maryland was
discarded because of cost and long payback issues.

In other cases, Headquarters and Support Activities Joint Cross-Service
Group members considered proposals that could have fostered jointly
operated support activities, but they were later dropped on the basis of
cost considerations and perceived operational risks. For example, the
group considered co-locating all military personnel offices at one
location. However, in analyzing this proposal, the group determined that
implementing the joint proposal would be very costly, while also citing
concerns about the uncertain availability of skilled employees at a single
location to operate the joint facility. Therefore, the group concluded
that it was better to co-locate or consolidate personnel centers within
the individual military departments. Similarly, for civilian personnel
centers the group developed a proposal to consolidate 25 offices that are
currently operated by the military departments and defense agencies into
10 DOD "joint" offices. However, the proposal was dropped after concerns
were raised by one military department that the risks associated with
implementing joint personnel offices concurrently with processing
paperwork supporting other BRAC-related personnel moves and implementing a
new standardized personnel data system were too high. Consequently, the
IEC directed the group to revise its proposal. The group revised its
proposal to provide for consolidating the 25 current offices into 12
offices-4 to be operated by the Army, 4 by the Navy, 1 by the Air Force,
and 3 by a single agency providing support to the defense agencies. While
DOD did not recommend the creation of joint military personnel offices or
joint civilian personnel offices, it is important to note that each of the
initial proposals included justifications citing ongoing efforts within
the department to establish standardized personnel processes and systems.

Appendix VII
Headquarters and Support Activities Joint
Cross-Service Group Selection Process and
Recommendations

The recommendation to co-locate components of the U.S. Transportation
Command15 does not include the Navy Military Sealift Command, one of the
service component organizations. The group developed a proposal to move
the Army and Navy component of the Transportation Command to Scott Air
Force Base, Illinois. While the Army agreed to the proposal, the Navy did
not believe that the group should be proposing to move the Military
Sealift Command because it was considered an operational headquarters and
not an administrative function under the purview of the Headquarters and
Support Activities Joint Cross-Service Group. The ISG agreed with the Navy
and deleted the Military Sealift Command from the recommendation, which
reduced projected 20-year net present value savings from $1.30 billion to
$1.28 billion.

15 Scott Air Force Base is the current home of the U.S. Transportation
Command headquarters and the Air Force Air Mobility Command, one of the
combatant command's subordinate component commands.

Appendix VIII

Industrial Joint Cross-Service Group Selection Process and Recommendations

The Industrial Joint Cross-Service Group followed the common analytical
framework established by the Office of the Secretary of Defense (OSD) for
completing its review. The group initially produced 34 candidate
recommendations; 3 were disapproved by the Infrastructure Executive
Council (IEC); and several were subsequently integrated into larger
military service recommendations. As a result, the group had 17 remaining
recommendations that are addressed in this appendix. These 17
recommendations represent a mixture of closures and realignments with the
realignments often encompassing the consolidation of various types of
industrial workloads at fewer locations. Although some of the
recommendations may be considered transformational, limited progress was
made in recommending major actions to foster greater interservicing among
the services. Industrial group officials said this was due to economic and
military value considerations as well as the downsizing of maintenance
facilities in prior BRAC rounds. Altogether, DOD projects these
recommendations to produce about $7.6 billion in net present value savings
over a 20-year period; nearly all are projected to have short payback
periods (time required to recoup up-front investment costs) with expected
savings offsetting expected implementation costs either immediately or
within a few years. One recommendation has a payback period exceeding 10
years. However, uncertainty exists about the precision of the savings
estimates because many estimates are based on efficiency gains that are
yet to be validated and other factors. Further scrutiny by the BRAC
Commission of this and other recommendations may be warranted to assess
the impact of reductions against future force structure needs or capacity
constraints. The DOD Inspector General and the military service audit
agencies, which performed audits of the data, concluded that the data were
sufficiently reliable for use during the BRAC process.

Organization and 	The industrial group was composed of senior-level
principal members from the installations directorates for each service,
the Defense Logistics

Focus 	Agency (DLA), and the Joint Chiefs of Staff and was supported by
staff from these organizations. The Under Secretary of Defense
(Acquisition, Technology and Logistics) chaired the group, which in turn
forwarded its proposed recommendations to the Infrastructure Steering
Group (ISG) for its review and approval.1 The group organized its BRAC
analyses around three subgroups: (1) maintenance, (2) ship overhaul and
repair, and

1 At the Office of the Secretary of Defense, the ISG and the IEC provided
overall coordination and direction to the DOD-wide process.

    Appendix VIII Industrial Joint Cross-Service Group Selection Process and
                                Recommendations

(3) munitions and armaments. All of the subgroups focused their work
similarly on identifying opportunities for reducing excess capacity.

Framework for Analysis

The industrial group's analytical process included a review of nine
distinct industrial areas across each of the military services. They
included: (1) ground vehicles, aircraft, and other depot maintenance; (2)
ground vehicles, aircraft, and other intermediate maintenance; (3) ship
depot maintenance; (4) ship intermediate maintenance; (5) munitions
production; (6) munitions storage; (7) munitions demilitarization; (8)
munitions maintenance; and (9) armaments production. As per the BRAC
process outlined by OSD, capacity analysis and military value analysis
provided the starting point for the cross-service group's work. The DOD
Inspector General and service audit agencies performed an important role
in ensuring the accuracy of data used in these analyses through extensive
audits of data gathered at various locations.

Capacity Analysis	To form the basis for its analysis, the group developed
metrics in each of the nine industrial areas to measure current capacity
and subsequently collected certified data linked to these metrics from
various defense activities across the country whose missions resided
within these categories. While the most predominate metric was direct
labor hours- used by both the maintenance and ship overhaul and repair
subgroups exclusively and by the munitions and armaments subgroup in some
instances-the munitions and armaments subgroup also used other metrics for
measuring capacity. For example, for measuring munitions production, the
subgroup used pounds and units, and for measuring munitions storage, the
subgroup used square feet and short tons. The disparate nature of the
functions analyzed by the group did not lend itself to a "one size fits
all" analytical approach and each of the three subgroups conducted its own
capacity analysis.

The munitions and armaments and ship overhaul and repair subgroups defined
excess capacity as the difference between current capacity and current
usage. For depot maintenance, the maintenance subgroup defined excess
capacity as the difference between current capacity and the larger of
current usage or core requirements. Core requirements are those workload
needs that must be performed in organic rather than contractor facilities.
For intermediate maintenance, the maintenance subgroup defined excess
capacity as the difference between current capacity and

Appendix VIII Industrial Joint Cross-Service Group Selection Process and
Recommendations

current usage. The cross-service group's capacity analysis showed that
excess capacity existed within many of functional areas it examined,
especially in those of munitions and armaments functions. As shown in
table 27, the estimates of excess capacity ranged from 7 percent to 91
percent among individual functional categories.

Table 27: Excess Capacity Identified by the Industrial Joint Cross-Service
Group

Capacity Percentage of Subgroup Function measure excess capacity

Maintenance	Ground vehicles, aircraft, and Direct labor other depot
maintenance hours

Ground vehicles, aircraft, and Direct labor other intermediate maintenance
hours

Ship overhaul and Ship depot maintenance Direct labor repair hours

Ship intermediate maintenance	Direct labor hours

Munitions and Munitions production Pounds/units

armaments Munitions storage 	Square feet/ short tons

                     Munitions demilitarization Short tons

Munitions maintenance	Direct labor hours

Armaments production	Direct labor hours

Source: Industrial Joint Cross-Service Group.

Note: These excess capacity figures are based on one eight-hour shift and
current capacity.

The three subgroups addressed surge requirements in their capacity
analyses to varying degrees. For the maintenance subgroup, the excess
percentages represent excess capacity above surge requirements, because
the collected core requirements data included surge requirements and the
excess capacity calculations were based on the larger of current usage or
core requirements. For the munitions and armaments subgroup, the excess
capacity percentages represent the capacity available to meet surge
requirements. According to munitions and armaments subgroup officials,
there are no over-arching, quantified, DOD-wide surge requirements for
munitions and armaments. Instead, surge becomes a factor of how much
excess capacity is available and can be addressed through multiple work
shifts. Conversely, the percentages for ship repair and overhaul do not

    Appendix VIII Industrial Joint Cross-Service Group Selection Process and
                                Recommendations

address surge requirements. According to ship overhaul and repair subgroup
officials, because the Navy's surge requirements are dictated by emergent
deployments or ship repair requirements and because shipyards are normally
workloaded to their workforce capacity, surge capability is limited to the
use of overtime and delaying previously planned work.

As table 27 shows, the data indicate that there was not much excess
capacity in the ground vehicles, aircraft, and other depot maintenance
area. Therefore, in that area the group focused much of its attention on
minimizing sites by redistributing and consolidating workload. On the
other hand, while many of the group's ship overhaul and repair and
munitions and armaments recommendations were directed toward reducing
excess capacity, group officials did not calculate a percentage for the
reduction in excess capacity made possible by implementing the
recommendations.

Military Value Analysis 	The military value of activities within the group
played a predominant role in formulating recommendations. In completing
its military value assessment, the industrial group assessed each activity
across the four established military value criteria to more fully evaluate
the potential for realignment and closure actions. As was the case with
capacity analysis, the disparate nature of the industrial areas analyzed
by the group precluded a uniform analytical approach among the three
subgroups. As a result, the subgroups differed in the methodology they
used to develop relative weights for the military value criteria for each
of their functions. Table 28 shows the various weights assigned to each of
the four military value criteria by the subgroups for their functions.

    Appendix VIII Industrial Joint Cross-Service Group Selection Process and
                                Recommendations

 Table 28: Industrial Joint Cross-Service Group Military Value Criteria Weights

                             Figures in percentages

Maintenance Ship overhaul and weight repair weight Munitions and armaments
weight

Munitions maintenance, Armaments Munitions storage, and manufacturing

Military value criteria Depot Intermediate Depot Intermediate production
demilitarization and production

1. The current and future mission 39 50 25 50 35 25
capabilities and the impact on
operational readiness of the total
force of the Department of
Defense, including impact on joint
warfighting, training, and
readiness.

     2. The availability and condition     30    30    25    15    15    20   
    of land, facilities, and associated                                 
       air space (including training                                    
       areas suitable for maneuver by                                   
        ground, naval, or air forces                                    
     throughout a diversity of climate                                  
       and terrain areas and staging                                    
       areas for the use of the Armed                                   
         Forces in homeland defense                                     
       missions) at both existing and                                   
       potential receiving locations.                                   

       3. The ability to accommodate       21    15    30    25    45    50   
     contingency, mobilization, surge,                                  
          and future total force                                        
     requirements at both existing and                                  
     potential receiving locations to                                   
     support operations and training.                                   

4. The cost of operations and the 10 5 20 10 5 5 manpower implications.

Total 100 100 100 100 100 100

Source: DOD and the Industrial Joint Cross-Service Group.

Note: The system of weights provided a basis for assigning relative value
to data collected and tabulated across each military value dimension. The
munitions maintenance, storage and demilitarization functions were
combined because the munitions and armaments subgroup applied the same
weights for these functions.

The group's military value analysis also included the development of
attributes, metrics, and data call questions for each of the nine
functional areas represented in the categories in the chart above which
were linked back to the four military criteria. Figure 15 provides
examples of these attributes, metrics, and data questions and shows how
each of these was linked back to the criteria.

    Appendix VIII Industrial Joint Cross-Service Group Selection Process and
                                Recommendations

Figure 15: Selected Attributes, Metrics, and Data Questions Used to Assess
Military Value of Depot Maintenance Activities

Source: GAO analysis of Industrial Joint Cross-Service Group data.

aThe BRAC military value criteria are the first four BRAC selection
criteria.

bMilitary value attributes are characteristics of each criterion. The
industrial group used a total of 27 military value attributes.

cMilitary value metrics are measures for the attributes. The industrial
group used a total of 58 military value metrics.

dThe industrial group used a total of 89 data call questions.

Because of the disparate nature of the industrial areas analyzed by the
industrial group, the subgroups also differed in the way they assigned
military value scores to their respective activities. For instance, the
maintenance subgroup determined military value by commodity2 only and

2 A commodity is a generic grouping of the types of depot and maintenance
work associated with end items, weapons systems, or major processes, such
as engines, combat vehicles, and calibration.

    Appendix VIII Industrial Joint Cross-Service Group Selection Process and
                                Recommendations

did not develop an overall military value score for activities in the
depot and intermediate maintenance functions. Because military value
scores were only determined for activities by commodity, activities were
only ranked within their respective commodities. For example, Rock Island
Arsenal, Illinois, received a military value score for its combat vehicle
maintenance workload and was ranked accordingly against all the other
depot level activities that perform combat vehicle maintenance. In
addition, because most activities involve multiple commodities, such as
major maintenance functions like aircraft engines, electronics, etc., many
of the activities received multiple military value scores. In the case of
Rock Island Arsenal, it not only received a military value score for its
combat vehicle maintenance work but also for its tactical vehicle
maintenance work and its other equipment maintenance work. These military
value scores were then used in an optimization model to determine the best
locations to consolidate various like commodities among the three
services. In all cases, the subgroup examined redistributing the workload
to activities with a higher military value score for that commodity.
According to the maintenance subgroup, determining military value by
commodity allowed for more opportunities to create interservicing3 and
consolidations of workload among the services. The maintenance subgroup's
process was focused on military value and available capacity without
regard to service. The final recommendations were tempered by financial
and operational considerations. However, as we discuss later, our analysis
shows that while some interservicing may be achieved, most of the group's
recommendations remained relatively service-centric. The ship overhaul and
repair and munitions and armaments subgroups, on the other hand, developed
overall military value scores for activities within their respective
functions and ranked their activities within those functions accordingly.
For example, all shipyards were ranked together under the depot
maintenance function, and all industrial activities that perform munitions
production were ranked together under the munitions production function.

DOD Inspector General's The DOD Inspector General and the service audit
agencies played and Service Audit Agencies' important roles in ensuring
that the data used in the industrial group's data Role in the Process
analyses were certified and properly supported. Through extensive audits

of the data collected from field activities during the process, these
audit

3 The term interservicing is used here to refer to the consolidation of
common workloads of more than one service under a single military service.

    Appendix VIII Industrial Joint Cross-Service Group Selection Process and
                                Recommendations

agencies notified the group regarding any identified data discrepancies
for the purpose of follow-on corrective action. While the process for
detecting and correcting data errors was quite lengthy, the audit agencies
ultimately deemed the industrial data to be sufficiently accurate for use
in the BRAC process.

Identification and Assessment of Alternate Scenarios and Selection of
Recommendations

The industrial group did not have complete capacity or military value data
when it initiated the development of potential closure and realignment
scenarios. Therefore, it had to rely on incomplete data as well as
military judgment to determine which industrial areas had excess capacity
and which could receive new workloads. As time progressed, however, the
group obtained the needed data to inform and support its scenarios. The
DOD Inspector General validated the data.

The maintenance and munitions and armaments subgroups used an optimization
model to help facilitate scenario development, while the ship overhaul and
repair subgroup, which had similar data problems, also relied on
incomplete data as well as military judgment to help formulate scenarios
for consideration. This subgroup did not rely on the optimization model as
extensively as the other subgroups due to the relatively small number of
activities analyzed. Collectively, the subgroups initially developed 120
proposals and scenarios and with the maturation of the data, completion of
Cost of Base Realignment Actions (COBRA) analyses, and elimination of
alternative scenarios, the industrial group settled on 34 recommendations
that were forwarded to the ISG with all but 3 being ultimately approved by
the IEC.

Despite having incomplete data, the maintenance subgroup began its
scenario development by generating several ideas as potential scenarios.
In testing the feasibility of these ideas, the maintenance subgroup found
it useful to use an optimization model, because the subgroup was dealing
with a universe of 57 commodities across 28 depot level activities and 11
commodities across over 200 intermediate level activities which made it
extremely difficult to determine where workload could be consolidated or
redistributed. For realignment considerations, officials told us the
preferred method was to consolidate workload at the highest military value
sites that remained open in the optimization results, but military
judgment also played a role in finalizing the sites. In some instances,
military judgment was used to override the results of the optimization
model. For example, the subgroup chose not to realign the rotary aircraft
workload from the Naval Air Depot at Cherry Point, North Carolina, to the
Corpus

Appendix VIII Industrial Joint Cross-Service Group Selection Process and
Recommendations

Christi Army Depot, Texas, even though it was proposed for realignment
under the optimization model because of concerns about establishing a
single point of failure or vulnerability for DOD's rotary aircraft
workload.

One issue that the maintenance subgroup dealt with during its scenario
development was that the current DOD capacity baseline for its maintenance
work was based on a single shift 40 hours per week workload. According to
the subgroup, when using the optimization model, it found that existing
capacity as measured on this basis would constrain its ability to identify
options for achieving more economical operations. Further, recognizing
that such a baseline was inconsistent with industry practice, the subgroup
modified the capacity baseline to one and a half shifts with a 60 hours
weekly workload, thus increasing available capacity at its industrial
activities and the potential for consolidating work at fewer locations. As
we reported after the 1995 BRAC round, a capacity baseline of a single
shift 40 hours per week workload is a conservative projection of capacity
because the private sector frequently uses a capacity baseline of two or
two and a half shifts.4 In addition, based on more current information of
private sector capacity utilization, we still believe that a single shift
is a conservative projection of capacity, since many firms today work
multiple shifts.

Like the maintenance subgroup, the munitions and armaments subgroup also
used the optimization model to test the feasibility of its ideas and to
facilitate its scenario development and analysis. Its emphasis was on
increasing multi-functional activities, (i.e., those activities that have
the capability to do more than one munitions and armaments function).
During scenario development, the subgroup's preference was to eliminate
excess capacity through closure versus realignment.

The ship overhaul and repair subgroup, on the other hand, used mostly
capacity and military value data in combination with military judgment in
developing and analyzing its scenarios. Due to the small number of
activities analyzed-22 depot and intermediate level ship overhaul and
repair activities-the subgroup did not have to rely on the optimization
model to determine where workload could be potentially consolidated or
redistributed. While it did use the model primarily to check the
feasibility and rationalization of scenarios, military judgment was
required because

4 GAO, Army Depot Maintenance: Privatization without Further Downsizing
Increases Costly Excess Capacity, GAO/NSIAD-96-201 (Washington, D.C: Sept.
18, 1996).

    Appendix VIII Industrial Joint Cross-Service Group Selection Process and
                                Recommendations

most of the subgroup's scenarios were influenced by Navy force structure
changes and planned changes in the homeports of ships. According to
industrial group officials, expected out-year changes in Navy force
structure-specifically expected reductions in the number of ships- allowed
them to recommend the closure of a shipyard. Expected changes in the
homeports of ships also influenced the subgroup's intermediate level
scenarios because the Navy's intermediate level maintenance is generally
performed where ships are homeported.

Recommendations 	The industrial group's 17 recommendations are estimated
to produce an estimated $7.6 billion in 20-year net present value savings.
Table 29

Approved by DOD	provides a summary of the financial aspects of the group's
recommendations.

Table 29: Financial Aspects of the Industrial Joint Cross-Service Group's
Recommendations

                 Fiscal year 2005 constant dollars in millions

                                                         Net         
                                                      annual          20-year 
                                                  recurring  Payback      net 
                                                                      present 
                  DOD One-time                                          value 
               report          Net implementation (costs) or  period  (costs) 
Recommended                 (costs) or                                  or 
     action     page   (costs) savingsa              savings (years) savingsb 

Realign to establish Navy Fleet Readiness Ind-19 ($298.1) $1,528.2 $341.2
immediate $4,724.2 Centers

    Close Hawthorne Army Depot, NV Ind-12 (180.3) 59.2 73.4 immediate 777.7

Close Umatilla Chemical Depot, OR Ind-14 (15.5) 89.1 61.0 immediate 681.1

     Close Newport Chemical Depot, IN Ind-8 (7.1) 95.6 35.7 immediate 436.2

    Close Deseret Chemical Depot, UT Ind-17 (4.4) 65.1 30.3 immediate 356.4

  Close Lone Star Army Ammunition Plant, TX Ind-16 (29.0) (4.7) 17.3 immediate
                                     164.2

Realign Ship Intermediate Maintenance Ind-18 (10.6) 26.8 8.2 1 104.3
Activity Norfolk, VA

      Close Kansas Army Ammunition Plant, KS Ind-9 (25.2) 2.1 10.3 2 101.4

          Realign Sierra Army Depot, CA Ind-6 (33.4) (7.2) 7.5 7 66.7

    Close Riverbank Army Ammunition Plant, CA Ind-5 (25.2) (10.4) 6.5 3 53.3

  Close Mississippi Army Ammunition Plant, MS Ind-11 (32.4) (10.8) 5.1 7 38.6

        Realign Lackland Air Force Base, TX Ind-15 (10.2) 0.1 2.9 3 28.0

      Realign Lima Army Tank Plant, OH Ind-10 (0.2) 5.9 1.7 immediate 22.3

        Realign Naval Shipyard Detachments Ind-26 (12.5) 0.9 2.3 4 20.7

    Appendix VIII Industrial Joint Cross-Service Group Selection Process and
                                Recommendations

(Continued From Previous Page)

                 Fiscal year 2005 constant dollars in millions

Net

annual recurring (costs) or

savings

Payback period (years)

                                20-year net present value (costs) or savingsb

DOD report page

One-time (costs)

Net implementation (costs) or savingsa

                               Recommended action

Realign Naval Weapons Station Seal Beach, CA

                                  Ind-4   (4.1)        2.3  1.6   1  
    Realign Rock Island Arsenal,  Ind-7                     3.1   9  
                 IL                       (27.0)    (16.2)           
Realign Watervliet Arsenal, NY Ind-13  (63.7)    (46.8)  5.2   18 
               Total                     ($778.9) $1,779.2 $613.3    $7,611.8 

Source: GAO analysis of DOD data.

aThis represents net costs or savings within the 6-year implementation
period required to implement BRAC recommendations.

bDOD used a 2.8 percent discount rate to calculate net present value.

Most of the projected savings from the group's recommendations are
concentrated in relatively few recommendations and nearly all have an
immediate or moderately short payback period where projected savings are
anticipated to offset the implementation costs either immediately or
within a few years. The recommendation regarding the establishment of Navy
fleet readiness centers is by far the largest in terms of overall savings,
accounting for about $341 million, or about 56 percent, of the total
estimated net annual recurring savings. As discussed later, only one
recommendation-the realignment of the Watervliet Arsenal, New York, has a
lengthy payback period exceeding 10 years.

Of the industrial joint cross-service group's 17 recommendations, 8 are
closures and 9 are realignments. However, contained within these
recommendations are 40 smaller, individual realignment actions and several
recommendations involve installations with less than 300 personnel that
could be but were not required to be proposed under BRAC. The following
summarizes some of our overall observations about the group's
recommendations.

o 	Interservicing: Despite setting up its military value scoring for
maintenance by commodity to foster opportunities for interservicing, the
industrial group actually developed few recommendations that proposed
greater interservicing. Of the 9 realignment recommendations, we consider
only three to involve interservicing-(1) realigning the Air Force's depot
maintenance workload at Lackland Air Force Base, Texas, to Tobyhanna Army
Depot, Pennsylvania, (2) realigning the Navy's depot

Appendix VIII Industrial Joint Cross-Service Group Selection Process and
Recommendations

maintenance at Naval Weapons Station Seal Beach, California to several
other service depots, and (3) realigning Lima Army Tank Plant, Ohio, to
support, in part, the future manufacturing of the Marine Corps
expeditionary force vehicle. DOD has stated recently that there is some
interservicing of ground maintenance work already being performed at the
major depots. However, while there is significant interservicing of
electronics work at Tobyhanna Army Depot, Pennsylvania and of rotary work
at Corpus Christi Army Depot, Texas, our analysis shows that
interservicing at the major ground vehicle maintenance depots is very
limited. For example, in fiscal year 2003, only 3 percent of Anniston Army
Depot's total workload was for the Marine Corps and only 3 percent of
Marine Corps Logistics Base Barstow's and Marine Corps Logistics Base
Albany's workloads was for the Army. Moreover, out of 17 major maintenance
depots across the services, the group only proposed the closure of
three-Portsmouth Naval Shipyard, Maine, Red River Army Depot, Texas and
Marine Corps Logistics Base Barstow, California-with Barstow ultimately
becoming a realignment. No recommendations were developed regarding the
Air Force's three relatively large air logistics centers and only
Navy-centric recommendations were developed regarding the Navy's three
naval air depots, despite that the industrial group had registered
scenarios consolidating similar types of work from a naval air depot into
air logistics centers. According to group officials, they decided not to
propose these as recommendations because of the Navy's desire to combine
its aircraft depot and intermediate work into fleet readiness centers and
because this recommendation offered greater financial benefits. As a
result, this essentially removed the naval air depots from the BRAC
analysis in considering opportunities for more interservicing. While not
considered an industrial group recommendation or otherwise addressed in
this appendix, the industrial group's work also helped the Navy develop a
recommendation realigning some of the workload at Marine Corps Logistics
Base Barstow to Army depots. This recommendation is discussed in appendix
IV.

o 	Closures: Regarding eight closures, four involve underutilized Army
ammunition facilities, and three are chemical demilitarization facilities
where the primary mission is slated to disappear in the coming years.

o 	Savings: Essentially all of the projected savings from the group's
recommendations are based on reducing overhead and eliminating civilian
and military personnel as installations are closed and functions are
realigned between installations. For example, 63 percent of the

    Appendix VIII Industrial Joint Cross-Service Group Selection Process and
                                Recommendations

group's total projected net annual recurring savings is from reductions in
overhead and 37 percent is from personnel eliminations with civilians
making up 21 percent of total net annual recurring savings and military
personnel 16 percent.

Taken individually, the recommendation that the industrial group expects
will generate the greatest amount of savings is the establishment of the
Navy's fleet readiness centers, which is estimated to produce net annual
recurring savings of $341 million or 56 percent of the group's total net
annual recurring savings and an estimated 20-year net present value
savings of $4.7 billion or 62 percent of the group's estimated total net
present value savings. This realignment recommendation differs from the
other realignments in that it proposes a significant business process
reengineering effort to integrate the Navy's non-deployable, intermediate
and depot level aircraft maintenance rather than a consolidation or
realignment of workload. While the changes proposed would appear to have
the potential for significant savings, as explained below, some
uncertainty exists about the full magnitude of the savings estimate for
this recommendation because most of the group's projected savings are
based on efficiency gains that have yet to be validated. For example,
based on our analysis, over 63 percent of the estimated net annual
recurring savings for this recommendation are miscellaneous recurring
savings projected to accrue from overhead efficiencies, such as reduced
repair time and charges, while 12 percent of the annual recurring savings
is produced from reductions in military personnel and 24 percent of the
savings is derived from reductions in civilian personnel. These
efficiencies are expected to be gained from integrating intermediate and
depot levels of maintenance and not having to ship as many items to
faraway depots for repair. In addition, 34 percent of the group's net
implementation savings for this recommendation is derived from other
one-time unique savings accrued from one-time reductions in spare parts
inventories.

Issues Identified with Time did not permit us to assess the operational
impact of each of the

industrial group's recommendations that was approved by DOD,Approved
particularly those with minimal financial impact and where minimal
Recommendations realignment and consolidation of workload was proposed. At
the same

time, however, we offer a number of broad-based observations about
selected proposed recommendations regarding high payback periods and
uncertain savings that the BRAC Commission may want to consider in its
review.

    Appendix VIII Industrial Joint Cross-Service Group Selection Process and
                                Recommendations

Navy's Fleet Readiness Centers

The recommendation on fleet readiness centers is essentially a Navy
business process reengineering effort to transform the way the Navy
conducts aircraft maintenance by integrating existing, non-deployable,
intermediate and depot maintenance levels into a single, seamless
maintenance level. The fleet readiness center construct focuses on the
philosophy that some depot level maintenance actions are best accomplished
at or near the operational fleet. Although the data suggests the potential
for savings, we believe there is some uncertainty regarding the magnitude
of the industrial group's expected savings for these readiness centers
because its estimates are based on assumptions that have undergone limited
testing, and full savings realization depends upon the transformation of
the Navy's supply system. In determining the amount of savings resulting
from the establishment of the fleet readiness centers, the industrial
group and the Navy made a series of assumptions that focused on combining
depot and intermediate maintenance in a way that would reduce the time an
item is being repaired at the intermediate level, which in turn, would
simultaneously reduce the number of items needed to be kept in inventory
and the number of items sent to a depot for repair. These assumptions,
which were the major determinant of realignment savings, were based on
historical data and pilot projects and have not been independently
reviewed or verified by the Naval Audit Service, DOD Inspector General, or
us. Moreover, how well these actions, if approved, are implemented will be
key to determining the amount of savings realized.

According to the group, two types of savings account for the majority of
the projected savings from the fleet readiness center recommendation.
First, one-time savings are projected to accrue from reductions in
inventory maintained at several Navy shore locations because item repair
cycle time for components is reduced with more depot level maintenance
being performed at or near the fleet, generally at an intermediate
facility. According to group officials, this reduction is accomplished by
stationing several depot level repair personnel at an intermediate
facility to assist in repairing an item on site rather that spending time
re-packing and shipping the item to a depot for repair. By reducing the
turnaround time for an item-that is, time spent in transit to and from a
depot level repair facility, group officials estimate that the average
time an item is in the repair pipeline will decrease from 28 hours to 9
hours, with nearly all that time spent on the actual repair. The
industrial group maintains this reduction in turnaround time will allow
for savings since fewer items will need to be kept in the shore based
aviation consolidated inventory because

Appendix VIII Industrial Joint Cross-Service Group Selection Process and
Recommendations

items will be getting repaired quicker and returned to the inventory
faster.5 The second type of savings is recurring overhead savings that are
projected to accrue from fewer items being sent to depots for repair.
According to group officials, establishing fleet readiness centers will
result in fewer items being sent to a depot to be repaired, thus reducing
per item maintenance costs. These savings are captured in the COBRA model
under overhead as miscellaneous recurring savings. As explained by group
officials, when an item is sent to a depot, two charges are applied to the
cost to repair the item-a component unit price and a cost recovery rate.
So, if fewer items are sent to a depot, then fewer repair charges are
incurred and less overhead costs are incurred.

However, according to an industrial group official, since the depots will
have fewer items to repair, they will have fewer opportunities to generate
revenue to support their working capital fund operations.6 This situation,
in turn, could create an incentive for the depot to increase its cost
recovery rate for items it does repair to make up for reduced revenues. If
this were to occur, then the projected savings would not materialize
because most of the fleet readiness center savings are based on a
reduction in the number of items sent to depots and are contingent on the
supply system not drastically raising the cost recovery rate. According to
industrial group officials, it will be important to overall transformation
efforts that DOD follow through on eliminating management structures and
duplicate layers of inventory in the supply system. Also, according to
these officials, some of this supply-side transformation is already
underway at the retail level in the form of a partnership between fleet
industrial supply centers and the naval air depots where material
management for the depots was handed over to the supply centers to
standardize supply chain processes, improve material availability, and
reduce the material excesses that have been a difficult problem for the
naval air depots. In addition, group officials stated that the supply and
storage joint cross-service group's recommendation to realign supply,
storage, and distribution management should also further this
transformation by eliminating unnecessary redundancies and

5 The shore based aviation consolidated allowance list inventory is a
consolidated list of components, repair parts, and consumable items and
depot and field level repairable items required to support planned
operational and maintenance missions at designated naval and Marine Corps
air stations.

6 The Navy working capital fund is a revolving fund that relies on sales
revenue rather than direct appropriations to finance its operations.
Activities under the fund are supposed to generate sufficient revenues to
recover expenses incurred in their operations and are expected to operate
on a break-even basis over time.

Appendix VIII Industrial Joint Cross-Service Group Selection Process and
Recommendations

duplication and by streamlining supply and storage processes, which will
reduce costs and help prevent a large increase in the cost recovery rate.

In addition, we believe there is some potential risk in properly
accounting for depot level work to meet legislatively mandated reporting
requirements on the percentage of depot workload performed in government
and contractor facilities,7 absent efforts to ensure adequate
differentiation of work completed for intermediate and depot level
maintenance. We previously reported on similar difficulties in 2001
involving a consolidation of intermediate and depot level work at Pearl
Harbor Naval Shipyard, Hawaii.8 We noted that, prior to consolidation, the
Navy's determination of depot and intermediate maintenance work was based
on which facility performed it-the former Pearl Harbor shipyard performed
depot work, and the former intermediate maintenance facility performed
intermediate work. However, because Pacific Fleet and Pearl Harbor
officials asserted that all work was considered and classified the same at
the consolidated facility, the management and financial systems did not
differentiate between depot and intermediate categories of work. As a
result, the lines between what was considered intermediate and depot
maintenance became blurred, making it harder to report what was
intermediate and depot maintenance. The industrial group maintains that
during the first few years of implementing the fleet readiness center
recommendation, the Navy will continue to operate depot maintenance within
the working capital fund (setting up a separate holding account) and
perform intermediate maintenance with mission funding. During this period,
depot maintenance will be reported as depot maintenance and intermediate
maintenance will be reported as intermediate maintenance. While this
should mitigate the accounting issue in the short-term, it is unclear to
what extent longer term measures will be needed to ensure proper reporting
of depot work to meet statutory requirements.

7 Under 10 U.S.C. 2466, not more than 50 percent of annual depot
maintenance funding provided to the military departments and defense
agencies can be used for work accomplished by private-sector contractors.
Section 2466 also requires annual reporting to the congress on the
distribution of depot maintenance funding between the public and private
sectors.

8 GAO, Depot Maintenance: Key Financial Issues for Consolidations at Pearl
Harbor and Elsewhere Are Still Unresolved, GAO-01-19 (Washington, D.C:
Jan. 22, 2001).

    Appendix VIII Industrial Joint Cross-Service Group Selection Process and
                                Recommendations

Savings for Chemical Depots after Implementation

The net annual recurring savings may be overstated for the three chemical
depots recommended for closure-Newport, Umatilla, and Deseret-and it is
unclear whether such facilities are appropriately included in the BRAC
process.9 The industrial group estimated net annual recurring savings of
$127 million for the three chemical demilitarization facilities, $20
million of which is from anticipated savings by not recapitalizing these
closed BRAC installations. However, the current missions of each of these
installations are focused on the destruction of existing chemical weapons
stockpiles, and after the stockpiles are destroyed, the destruction
facilities themselves are scheduled to be dismantled and disposed of in
accordance with applicable laws and agreements with the governors of the
states in which they are located. With the exception of the recommended
transfer of storage igloos and magazines from Deseret to Tooele Army
Depot, Utah, Army officials have not identified any existing plans for
future missions at these depots once the chemical destruction mission is
complete. Consequently, it is unclear how the closure of the depots will
result in recapitalization savings. Additionally, given the general delays
in the Army's chemical weapons destruction program10 it is uncertain that
it will be able to complete the chemical weapons destruction mission and
close these depots within the 6-year BRAC statutory implementation period.

Hawthorne Army Depot	There is uncertainty surrounding the Army's ability
to close the Hawthorne Army Depot, Nevada, by 2011, the final year as
prescribed by the BRAC legislation for implementing BRAC actions. The Army
may be unable to demilitarize all the unserviceable munitions stored at
the depot by 2011, thereby placing the Army at risk for closing the depot
by that date. Army officials told us that demilitarization funds have not
been fully used for demilitarization purposes in recent years, but for
other purposes. As a

9Pueblo Chemical Depot was removed from the BRAC closure list two weeks
before the recommendations were released. During the BRAC process, we
expressed our concerns that Pueblo would not be able to successfully
demilitarize its stockpiles within the statutory BRAC timeframe because a
plant has yet to be built.

10GAO, Chemical Weapons: Destruction Schedule Delays and Cost Growth
Continue to Challenge Program Management, GAO-04-634T (Washington, D.C.:
Apr. 1, 2004), GAO, Nonproliferation: Delays in Implementing the Chemical
Weapons Convention Raise Concerns About Proliferation, GAO-04-361
(Washington, D.C.: Mar. 31, 2004), and GAO, Chemical Weapons: Sustained
Leadership, Along with Key Strategic Management Tools, Is Needed to Guide
DOD's Destruction Program, GAO-03-1031 (Washington, D.C.: Sept. 5, 2003).

    Appendix VIII Industrial Joint Cross-Service Group Selection Process and
                                Recommendations

result, the stockpile of unserviceable munitions is growing. The funding
situation is of such concern that an Army official told us they intend to
request the DOD Comptroller issue a memorandum that would administratively
"fence" funding in the demilitarization account to better ensure that the
funds will be used for reducing the stockpiles of unserviceable munitions.
This official also told us that this funding situation could be further
exacerbated with the potential for the return to the United States of
additional unserviceable munition stockpiles that are currently stored in
Korea, even though the group considered these stocks in its analysis. This
official stated that if these unserviceable munitions are returned for
demilitarization to Hawthorne, there will be added pressure to finish the
demilitarization process in time to close the facility by 2011.

Closure of Ammunition Plants

Currently, the Army leases some property at its ammunition plants through
the Army's program called the Armament Retooling and Manufacturing Support
Initiative. DOD has recommended for closure four ammunition plants that
are part of this initiative-Mississippi, Kansas, Lone Star, and Riverbank.
We previously reported that, while this initiative has offset some of the
Army's maintenance costs, maintaining ammunition plants in an inactive
status still represents a significant cost to the federal government.11
Through this initiative, the Army contracts with an operating contractor
that conducts maintenance, repair, restoration, and remediation in return
for use of the inactive part of the facility. The operating contractor, in
turn, locates and negotiates with tenants regarding lease rates, facility
improvements, and contract terms. However, the effect on these tenants of
closing the four ammunition plants involved with the initiative is
currently unknown. Army officials responsible for the initiative told us
that past transfers of such property outside of the BRAC process have been
handled poorly in that the General Services Administration or Army Corps
of Engineers, the agencies responsible for transferring excess property,
evicted the tenants and then sold the property separately, as was the case
in past closures such as the Indiana Army Ammunition Plant. Army officials
said that property transfers conducted in this manner could be costly
because the government must incur some costs that were paid by the
tenants, such as for security and maintenance. For example, an Army
analysis showed that retaining the ARMS tenants on Indiana Army Ammunition
plant rather than evicting them would have saved about

11GAO, Military Bases: Cost to Maintain Inactive Ammunition Plants and
Closed Bases Could be Reduced, GAO/NSIAD-97-56 (Washington, D.C.: Feb. 20,
1997).

    Appendix VIII Industrial Joint Cross-Service Group Selection Process and
                                Recommendations

$41 million. Additionally, DOD may incur some costs if leases are
terminated early. An industrial group official told us that the group
included termination costs for leases that extended past the proposed
closure date but only for tenants performing DOD work, not for other
tenants. We believe that lease termination costs should have been included
for any tenant's lease that extends past the proposed closure date, since
there may be a cost incurred for breaking the lease early. However Army
officials said that it would be difficult to estimate such potential costs
at this time.

Watervliet Arsenal, New York

Despite having a payback period of 18 years, the industrial group proposed
the realignment of Watervliet Arsenal, New York, because it has
considerable excess capacity and DOD will no longer require some of its
capabilities. The group had originally considered either moving the entire
workload of the arsenal to Rock Island Arsenal, Illinois, or moving the
entire workload of Rock Island Arsenal to Watervliet Arsenal. However,
according to industrial group officials environmental issues regarding
potential chromium discharges into the Mississippi River and costs
associated with moving heavy industrial equipment precluded a
costeffective realignment of moving the work at Watervliet Arsenal to Rock
Island Arsenal. Similarly, air quality issues regarding sulfur dioxide
emissions along with the costs to move equipment precluded a costeffective
realignment of moving the work at Rock Island Arsenal work to Watervliet
Arsenal, since the Northeast region already exceeds allowable limits for
sulfur dioxide emissions. As shown in the table 29, the Watervliet
recommendation has a payback period of 18 years, with about $63.7 million
in one time unique costs and only $5.2 million in net annual recurring
savings. According to industrial group officials, these one-time costs
reflect the costs of "shrinking the footprint," (i.e., moving out of
buildings and eliminating and moving excess equipment at both the arsenal
and the accompanying research laboratories also located at the arsenal).

Appendix IX

Intelligence Joint Cross-Service Group Selection Process and
Recommendations

The Intelligence Joint Cross-Service Group followed the common analytical
framework established by the Office of the Secretary of Defense (OSD) in
reviewing its functions and facilities. The Intelligence Joint
Cross-Service Group produced two recommendations that it projects will
yield about $588 million in 20-year net present value savings, with a
payback period of 8 years for each recommendation. The majority of savings
in the two recommendations result from lease terminations. Unlike the
services or other groups, there is little savings projected from personnel
reductions because, according to officials, almost all of the personnel
will relocate and end strength is projected to increase as a result of
program growth. The DOD Inspector General and service audit agencies,
which performed audits of the data, concluded that the data were
sufficiently reliable for use during the BRAC process.

Organization and Focus

The intelligence group was responsible for reviewing intelligence
functions throughout DOD. Previous BRAC rounds did not involve the
participation of any joint cross-service group dedicated to analyzing
intelligence functions. The intelligence group was chaired by the Deputy
Under Secretary of Defense (Counterintelligence & Security).1 The Group's
principals included senior members from the Defense Intelligence Agency,
National Geospatial-Intelligence Agency, National Reconnaissance Office,
National Security Agency, each military department, and the Joint Staff
Directorate for Intelligence, along with representation from the offices
of the Director, Central Intelligence Community Management Staff, and the
Department of Defense Inspector General.

The intelligence group formed four functional subgroups: Sources and
Methods; Correlation, Collaboration, Analysis, and Access; Management
Activities; and National Decisionmaking and Warfighting Capabilities. The
first three subgroups each created an analytical construct for measuring
defense intelligence capacity that resulted in a capacity data call. These
subgroups were eventually replaced by a single Core Team that included
membership from each organization represented in the Intelligence Joint
Cross-Service Group. This team created a single, consolidated analytical
construct for measuring the military value of defense intelligence
facilities. The team also performed detailed capacity and military value
analysis,

1 At the Office of the Secretary of Defense, the Infrastructure Steering
Group (ISG) and the Infrastructure Executive Council (IEC) provided
overall coordination and direction to the DOD-wide process.

    Appendix IX Intelligence Joint Cross-Service Group Selection Process and
                                Recommendations

evaluated scenario ideas, executed scenario data calls, and prepared
Intelligence Joint Cross-Service Group candidate recommendations for
deliberation.

The overarching intelligence principle the group worked to support was
that DOD needs intelligence capabilities to support the National Military
Strategy by delivering predictive analyses, warning of impending crises,
providing persistent surveillance of our most critical targets, and
achieving "horizontal" (that is, interagency) integration of networks and
databases. To do so, the group focused on four key objectives:

o 	Locating and upgrading facilities on protected installations as
appropriate.

o  Reducing vulnerable commercial leased space.

o 	Realigning selected intelligence functions/activities and establishing
facilities to support continuity of operations and mission assurance
requirements.

o 	Providing infrastructure to facilitate robust information flow between
analysts, collectors, and operators at all echelons and achieve mission
synergy.

The group conducted an assessment of defense intelligence for buildings,
facilities, and personnel performing the intelligence function. The
objective was to project an alignment of present capabilities, with
current organizational compositions and business processes, to desired
future operational capabilities, using DOD's transformational concepts and
preferred organizational construct.

Framework for Analysis

The intelligence group initially identified five broad functions to
analyze in defense intelligence: Sources and Methods (Acquisition and
Collection); Analysis; Dissemination; Management Activities; and
Sustainability. Based on subsequent Infrastructure Steering Group
guidance, these five broad functions were consolidated into a single
function-defense intelligence- in the final military value scoring plan.
Capacity analysis and then military value analysis were the starting
points for the BRAC analytical process. The DOD Inspector General and
service audit agencies performed an important role in ensuring the
accuracy of data used in these analyses through extensive audits of data
gathered at various locations.

    Appendix IX Intelligence Joint Cross-Service Group Selection Process and
                                Recommendations

Capacity Analysis	To assess capacity, the intelligence group identified
buildings and facilities performing the intelligence function and
developed related attributes, metrics, and questions for analysis. Data
calls were issued to the defense intelligence community to gather
certified data on intelligence buildings and facilities. The capacity
analysis identified limited excess capacity in some organizations, but no
overall excess capacity, as shown in table 30.

  Table 30: Excess Capacity Identified by the Intelligence Joint Cross-Service
                                     Group

Percentage of excess Organization capacity (shortage)

Air Force

                                    Army (3)

                               Marine Corps (20)

                                    Navy (4)

                 Under Secretary of Defense, Intelligence (17)

Counter Intelligence Field Agency

                     Joint Staff (Combatant Commands) (58)

                        Defense Intelligence Agency (24)

National Geospatial-Intelligence Agency

National Reconnaissance Office

National Security Agency

                                  Total (1.9)

Source: Intelligence Joint Cross-Service Group.

Note: Excess capacity measured in square feet.

The negative excess capacity shown in table 30 differs from the group's
initial capacity data results, which showed an overall excess capacity of
18 percent. However, after reviewing the initial data, the intelligence
group made two adjustments. First, the group removed buildings with no
direct intelligence mission, such as barracks, pump houses, tunnels, or
warehouses. Then the group increased its estimate of the area of square
feet required for personnel temporarily working at another intelligence

    Appendix IX Intelligence Joint Cross-Service Group Selection Process and
                                Recommendations

entity and for contractor personnel by 50 percent.2 The group did not
identify any known documented requirements for the defense intelligence
community to set aside space or facilities for surge. The intelligence
community has historically handled surge operations by reassigning and
reallocating existing resources within the current square footage.

Military Value Analysis	All BRAC 2005 selection criteria were applied by
the intelligence group across the defense intelligence functional support
area and used with the force structure plan and infrastructure inventory
to perform analyses. Priority consideration was given to military value by
evaluating and scoring activities based on the first four selection
criteria. Table 31 below shows the weighted value the intelligence group
gave to the criteria, based on a 100-point scale.

Table 31: Intelligence Joint Cross-Service Group Military Value Criteria
Weights

                             Figures in percentages

                            Military value criteria

1. The current and future mission capabilities and the impact on
operational readiness of the total force of the Department of Defense,
including the impact on joint warfighting, training, and readiness.

2. The availability and condition of land, facilities, and associated
airspace (including training areas suitable for maneuver by ground, naval,
or air forces throughout a diversity of climate and terrain areas and
staging areas for the use of the Armed Forces in homeland defense
missions) at both existing and potential receiving locations.

3. The ability to accommodate contingency, mobilization, surge, and future
total force requirements at both existing and potential receiving
locations to support operations and training.

4. The cost of operations and the manpower implications.

Total

Source: DOD and the Intelligence Joint Cross-Service Group.

Note: The system of weights provided a basis for assigning relative value
to data collected and tabulated across each military value dimension.

2 Initially, the group developed a space allowance of 100 square foot for
detailees and contractors. However, the group subsequently found out that
detailees and contractors consisted of all levels of personnel, including
high ranking liaisons, managers, and analysts. As a result, the group
raised the space allowance 150 square foot per person, which they believe
more accurately reflects the intelligence community average for
government, military and civilian personnel.

    Appendix IX Intelligence Joint Cross-Service Group Selection Process and
                                Recommendations

The intelligence group assessed the military value of its facilities based
on those facilities' capabilities to support the intelligence function. A
single scoring plan measured the value of both the infrastructure and the
personnel performing the defense intelligence function at a given
facility. Attributes and weighted metrics were used to compute the
military value of a building by assessing the facility's physical
infrastructure and locations as they related to selection criteria 1
through 4. After computing military value scores, a rank-ordered listing
of the 267 intelligence facilities was developed for the defense
intelligence function. Subsequently, strategydriven scenarios were
validated by analyses of military value data and military judgment. Figure
16 illustrates how the military value attributes, metrics, and data
questions were linked to the military value criteria using selected
attributes, metrics, and questions.

Figure 16: Selected Attributes, Metrics, and Data Questions Used to Assess
                   Military Value of an Intelligence Facility

Source: GAO analysis of Intelligence Joint Cross-Service Group data.

    Appendix IX Intelligence Joint Cross-Service Group Selection Process and
                                Recommendations

a The BRAC military value criteria are the first 4 BRAC selection
criteria.

b Military value attributes are characteristics of each criterion. The
Intelligence Joint Cross-Service Group used a total of 2 military value
attributes.

c Military value metrics are measures for the attributes. The Intelligence
Joint Cross-Service Group used a total of 12 military value metrics.

d The Intelligence Joint Cross-Service Group used a total of 59 data call
questions.

A similar process was followed for all of the 267 intelligence facilities.

DOD Inspector General's and Service Audit Agencies' Role in the Process

The DOD Inspector General and service audit agencies reviewed the data and
processes used by the Intelligence Joint Cross-Service Group to develop
its recommendations. The overall objective was to evaluate the validity,
integrity, and documentation of data used by the subgroups. The DOD
Inspector General and service audit agencies used real-time audit coverage
of data collection and analysis processes to ensure that the data used in
the groups' capacity analysis, military value analysis, and use of
optimization models was certified and was used as intended. Through
extensive audits of the data collected from field activities during the
process, the DOD Inspector General notified the group of data
discrepancies for the purpose of follow-on corrective action. The DOD
Inspector General ultimately determined, once the corrections to all the
discrepancies were noted, the intelligence data to be sufficiently
reliable for use in the BRAC process.

Identification and Assessment of Alternate Scenarios and Selection of
Recommendations

The Intelligence Joint Cross-Service Group developed 13 scenarios, which
after further analysis led to 6 candidate recommendations being presented
to the Infrastructure Steering Group and the Infrastructure Executive
Council, the latter of which approved 3 candidate recommendations. One of
these 3 approved candidate recommendations was subsequently incorporated
into a recommendation proposed by the headquarters group.

Some scenarios were eliminated because they were alternatives to a
proposed recommendation. Other scenarios were eliminated because of
concerns over high implementation costs and long payback periods-that is,
the length of time required for the savings to offset closure costs. For
example, the group developed a scenario to establish selected continuity
of operations and mission assurance functions at White Sands Missile
Range, New Mexico, but it was disapproved by the Infrastructure Executive
Council because it had a one-time cost of $1.8 billion and a projected
payback period of never.

    Appendix IX Intelligence Joint Cross-Service Group Selection Process and
                                Recommendations

Recommendations 	The Intelligence Joint Cross-Service Group projects that
its two recommendations will produce almost $588 million in 20-year net
present

Approved by DOD	value savings, and almost $138 million in net annual
recurring savings. Table 32 below provides a summary of the financial
aspects of the group's recommendations.

Table 32: Financial Aspects of the Intelligence Joint Cross-Service
Group's Recommendations

                 Fiscal year 2005 constant dollars in millions

                                                               Net         
                                                     Net    annual Payback  20-year 
                         DOD    One-time                                        net 
                        report            implementation recurring  period  present 
  Recommended actions    page     (costs) (costs)         savings  (years)    value 
                                          savingsa                         savingsb 
    Close National      Int-4                               $127.7           $535.1 
Geospatial-Intelligence        ($1,117.3)       ($796.7)           8 years 
     Agency leased                                                         
locations, relocate to                                                     
         Fort                                                              
      Belvoir, VA                                                          
    Realign Defense     Int-3                                 10.1         
  Intelligence Agency              (96.7)         (48.8)           8 years 
       functions                                                           
         Total                 ($1,214.0)       ($845.5)    $137.8           $587.9 

Source: GAO analysis of DOD data.

aThis represents net costs or savings within the 6-year implementation
period required to implement BRAC recommendations.

bDOD used a 2.8 percent discount rate to calculate net present value.

The majority of the net annual recurring savings in the two
recommendations is from the avoidance of future leased cost when
activities move from leased space to military installations. Intelligence
Joint Cross-Service Group officials noted that about one-half of the
estimated $1.1 billion one-time costs for the National
Geospatial-Intelligence Agency move will be paid from National
Intelligence Program funds.

Issue Identified with The recommendation to move the National
Geospatial-Intelligence Agency

from various leased sites to Fort Belvoir, Virginia, will have a
significantApproved impact on the local community when added to other
proposals to move Recommendations activities to Fort Belvoir.3 This one
proposal would move about 8,500

personnel to Fort Belvoir from Bethesda, Maryland, Washington, DC and

the northern Virginia area. The BRAC Commission may wish to consider

the impact on the local community infrastructure, such as roads and public

Appendix IX Intelligence Joint Cross-Service Group Selection Process and
Recommendations

transportation, when evaluating this and other proposals affecting Fort
Belvoir.

3 The headquarters group has several recommendations that propose to move
activities to Fort Belvoir.

Appendix X

Medical Joint Cross-Service Group Selection Process and Recommendations

The Medical Joint Cross-Service Group followed the common analytical
framework established by the Office of the Secretary of Defense (OSD) for
reviewing the military health care system. It produced 22 candidate
recommendations; one was disapproved late in the process by the
Infrastructure Executive Council (IEC), and one was integrated with a
service recommendation. The remaining 20 recommendations were combined
into 6 recommendations that were ultimately approved by DOD. These 6
recommendations are projected to produce about $2.7 billion in estimated
net present value savings over a 20-year period. The expected payback
period, or length of time for the savings to offset costs associated with
the recommendations, varies from immediately to 10 years. We have
identified various issues regarding the recommendations that may warrant
further attention by the BRAC Commission. These include the likelihood
that some estimated savings could be less than projected, lengthy or no
payback periods for certain proposed actions imbedded within the more
complex recommendations, and uncertainties about future requirements and
their impact on the viability of the recommendations. While the group
encountered some challenges in obtaining accurate and consistent certified
data on a cross-service basis, the DOD Inspector General and the military
service audit agencies ultimately concluded that the data used by the
medical group were sufficiently reliable for use in the BRAC process.

Organization and Focus

The medical group was chaired by the Surgeon General of the Air Force and
included the Surgeon General of the Navy, the Deputy Surgeon General of
the Army, the Medical Officer of the Marine Corps, and the Acting Deputy
Assistant Secretary for Health Budgets and Financial Policy. In carrying
out its BRAC analyses, the medical group established functional area
working groups and subgroups consisting of subject matter experts and
analysts from each of the military services and the OSD Health Affairs.1
The group's objectives were to develop recommendations to:

o  support the warfighters and their families,

o 	maximize military value while reducing infrastructure and maintaining
an adequate surge capability,

1 At OSD, the Infrastructure Steering Group (ISG) and the IEC provided
overall coordination and direction to the DOD-wide process.

                                   Appendix X
                  Medical Joint Cross-Service Group Selection
                          Process and Recommendations

o 	maintain and improve access to care for all beneficiaries, including
military retirees,

o  enhance jointness,

o  identify and maximize synergies from co-location or consolidation, and

o 	examine outsourcing opportunities, such as increasing the use of
civilian care providers, to allow DOD to leverage its efforts across the
overall United States health care system.

Framework for Analysis

The medical group organized and conducted its BRAC analyses of DOD's
military health care system focusing on three broad functions: (1) health
care services; (2) health care education and training; and (3) medical and
dental research, development, and acquisition. As with other military
services and joint cross-service groups, capacity and military value
analyses were the starting points for the group's analyses. The DOD
Inspector General and service audit agencies performed an important role
in ensuring the accuracy of data used in these analyses through extensive
audits of data gathered at various locations.

Capacity Analysis	In establishing the analytical framework for developing
its recommendations, the medical group analyzed the military health
system's capacity in terms of services, workloads, and facilities. The
group developed specific functional area metrics for measuring capacity
and collected certified data associated with these metrics from military
installations across the country. It used a range of metrics, depending on
the functional area being assessed, such as military health care
population and workloads, number of hospital beds, available and currently
used building space, length and frequency of education and training
programs, personnel requirements, and equipment usage, to measure
capacity.

Based on the group's capacity analysis, the military health system was
found to have excess capacity within two of the three functional areas it
reviewed. As shown in table 33, the excess capacity resides predominantly
in the health care services and education and training functions. Within
the health care services function, the analysis showed that dental care
has virtually no excess capacity because of the use of contract providers
and substantial infrastructure adjustments since previous BRAC rounds. The

Appendix X
Medical Joint Cross-Service Group Selection
Process and Recommendations

group's capacity analysis report acknowledged that even though adjustments
have been made to the health care system since the BRAC 1995 round, the
medical system infrastructure is still generally based on a Cold War
strategy with minimal reliance on civilian health care providers.

Table 33: Excess Capacity Identified by the Medical Joint Cross-Service
Group

Percentage of Functional areasa excess capacity

                              Health care services

Health care -primary care

Health care -specialty care

Health care inpatient

Health care dental

                       Health care education and training

Laboratories

Clinical

Classrooms

               Health care research, development, and acquisition

Personnel

Source: Medical Joint Cross-Service Group data.

aA variety of metrics was used depending on the functional areas being
assessed. For example, the number of procedures was used for assessing
health care services while the number of full-time equivalents was used in
assessing health care research, development, and acquisition functions.

The group developed surge factors for its analysis of inpatient and
research, development, and acquisition functions, which are part of the
percentages in table 33. It determined that the high operational tempo
would be maintained for 30 days. However, the group determined that surge
factors were not necessary for other functional areas because of their
inherent surge capabilities to handle potential workload increases. It
assumed that potential workload surge requirements could be handled
through various sources, such as the use of civilian providers in the

Appendix X
Medical Joint Cross-Service Group Selection
Process and Recommendations

TRICARE network,2 civilian medical education and training programs, and
extended operations.

According to DOD medical officials, the Department of Health and Human
Services, rather than DOD, is responsible for domestic homeland medical
support, but defense medical personnel and infrastructure could be used to
assist in handling domestic medical emergency situations. According to DOD
officials, since this support is not part of DOD's defined mission, it was
not included in the medical group's analysis. However, DOD officials also
told us that the Joint Chiefs of Staff and the OSD had coordinated the
BRAC analysis with major commands that would be impacted by BRAC
proposals, including the U.S. Northern Command, which is responsible for
the homeland defense mission.

DOD is in the process of reviewing the military health care system's
ability to meet future medical readiness requirements, including an
evaluation of medical infrastructure at various levels of operations from
contingencies to full operational surges. DOD intends to include
Department of Homeland Security policies in this review. According to DOD
officials, the results of this ongoing assessment were not included in the
medical group's capacity analysis because the assessment is not expected
to be completed until after the BRAC recommendations are finalized,
following reviews by the BRAC Commission, the President, and Congress.
Nevertheless, the medical group made a determination that the current
medical force size3 was adequate to meet the requirements of various war
plans, and after reviewing the fiscal year 2006 program objective
memorandum and the 20-year force structure plan, it decided to use the
current force structure for its analysis. Further, the group concluded
that deployment force sizing, a readiness issue, did not have direct
influence on determining excess facility capacity.

The medical group estimates that its recommendations, if adopted, would
result in a 12 percent reduction in excess inpatient medical capacity and
an approximately 7.4 million square feet net reduction in overall facility
space.

2 Medical care under TRICARE is provided by DOD personnel in military
treatment facilities or through civilian providers in civilian facilities.
During the 1990s, DOD restructured its health care system into TRICARE to
improve beneficiaries' access to health care while maintaining quality and
controlling costs.

3 The DOD health care system included about 163,000 medical personnel
worldwide in fiscal year 2004, some of whom are active duty military
personnel assigned to deployable units that may rotate back to military
treatment facilities.

                                   Appendix X
                  Medical Joint Cross-Service Group Selection
                          Process and Recommendations

Military Value Analysis	The medical group's assessment of military value,
like its excess capacity assessment, focused on the same three functional
areas: (1) health care services; (2) health care education and training;
and (3) medical and dental research, development, and acquisition.

The military value analysis helped to establish the basis for realigning
medical functions across the various installations or closing specific
activities within the medical infrastructure. It also helped to gauge the
impact of the group's proposed scenarios on the overall DOD health care
system. The military value methodology for this BRAC round was similar, in
many respects, to the one used in the 1995 round, especially for medical
functions. For example, both rounds identified affected populations and
local civilian providers within catchment areas.4 In both rounds, military
value played a predominant role in formulating recommendations. Moreover,
during the 2005 round, the medical group considered the impact on local
beneficiaries, such as military retirees, from downsizing or eliminating
medical facilities, which included input from a DOD-chartered military
health benefit working group.5 This working group included independent
members who represented TRICARE regions throughout the United States.

The medical group's functional military value analysis assessed the
relative capabilities of various activities and facilities supporting the
military health care system's mission and operational needs. Its military
value analysis was directly linked to the four military value criteria
required by the BRAC legislation. For example, the military value analysis
gave greater weight to services supporting active duty members in order to
emphasize force readiness. Table 34 shows the relative weights that the
group developed for each of the four selection criteria that relate to
military value.

4 Catchment areas are geographic areas determined by the Assistant
Secretary of Defense for Health Affairs that are defined by five-digit zip
codes, usually within an approximate 40-mile radius of military treatment
facilities with inpatient care.

5 The National Defense Authorization Act of Fiscal Year 2004 (P.L.
108-136, Section 726 [Nov. 24, 2003]) required the Secretary of Defense to
consult with the working group in developing recommendations in the 2005
BRAC round. The working group is expected to provide a plan to the
Secretary of Defense in order to provide health care services to persons
who are entitled to and are receiving health care and whose accessibility
to it will be affected by 2005 BRAC actions.

Appendix X
Medical Joint Cross-Service Group Selection
Process and Recommendations

  Table 34: Medical Joint Cross-Service Group Military Value Criteria Weights

                             Figures in percentages

               Medical and Health care dental research, Health care education
                           development, services and training and acquisition

Military value criteria weight weight weight

1. The current and future mission 45 45
capabilities and the impact on
operational readiness of the total force of
the Department of Defense, including the
impact on joint warfighting, training, and
readiness.

               2. The availability and condition of land,    25            20 
                      facilities, and associated airspace           
                   (including training areas suitable for           
                 maneuver by ground, naval, or air forces           
                    throughout a diversity of climate and           
                  terrain areas and staging areas for the           
                      use of the Armed Forces in homeland           
                   defense missions) at both existing and           
                           potential receiving locations.           

                            3. The ability to accommodate    10            25 
                    contingency, mobilization, surge, and           
                  future total force requirements at both           
               existing and potential receiving locations           
                      to support operations and training.           

4. The cost of operations and the 20 10 manpower implications.

                               Total 100 100 100

Source: DOD and Medical Joint Cross-Service Group.

Note: The system of weights provided a basis for assigning relative value
to data collected and tabulated across each military value dimension.

In developing its analysis in accordance with the criteria above, the
group developed specific functional area attributes, metrics, and data
call questions to assist in assessing military value. Figure 17 provides
an example of such analysis for the health care services functional area
and its linkage to the BRAC legislation.

                                   Appendix X
                  Medical Joint Cross-Service Group Selection
                          Process and Recommendations

Figure 17: Selected Attributes, Metrics, and Data Questions Used to Assess
                     Military Value of Health Care Services

Source: GAO analysis of Medical Joint Cross-Service Group data.

aThe BRAC military value criteria are the first four BRAC selection
criteria.

bMilitary value attributes are characteristics of each criterion. The
medical group used a total of six military value attributes in its health
care services functional area analysis.

cMilitary value metrics are measures for the attributes. The medical group
used a total of 16 military value metrics in its military value analysis
of health care services functions.

dThe medical group used a total of 24 data call questions in its health
care services military value analysis.

DOD Inspector General's and Service Audit Agencies' Roles in the Process

The DOD Inspector General and the service audit agencies played important
roles in ensuring that the data used in the medical group's analyses were
certified and properly supported. The involvement of these audit groups
included validation of data submitted by the military services, compliance
with data certification requirements, the integrity of the group's
databases, accuracy of the analytical process in terms of calculations,
and the adequacy of supporting documentation. These audit groups conducted
extensive audits of the data collected from the military installations,
and in some instances data discrepancies were identified for follow-on
corrective actions. While the process for detecting and correcting data
errors was quite lengthy, the DOD Inspector General and audit agencies
determined that the medical-related data were sufficiently reliable for
use in the BRAC process.

                                   Appendix X
                  Medical Joint Cross-Service Group Selection
                          Process and Recommendations

Identification and Assessment of Alternate Scenarios and Selection of
Recommendations

The medical group's study objectives, military judgment, and capacity and
military value analyses helped to identify closure and realignment
scenarios for consideration. Identification and evaluation of scenarios
was also facilitated by use of an optimization model to identify
recommendations that could aid in optimizing medical health care workloads
and infrastructure.6 The group also developed scenarios that included
establishing a minimum level of average daily patient workload for
inpatient facilities and by reducing excess capacity in multiservice
markets to achieve efficiencies.7 It also used the Cost of Base
Realignment Actions (COBRA) model to estimate the potential net costs or
savings for its scenario proposals. The group also considered the
scenarios' impact on the local economy, the DOD medical beneficiary
population and graduate medical education requirements, and the
environment.

The medical group submitted 22 recommendations to the IEC, which
disapproved one of the recommendations-the proposal to close the Uniformed
Services University of the Health Sciences at Bethesda, Maryland. This
matter is discussed further in the next section of this appendix. Further,
another recommendation was integrated with a service realignment and
closure action. The remaining 20 recommendations were combined into 6
recommendations that were ultimately approved by DOD.

Recommendations 	The group produced 6 recommendations which they reported
will yield an estimated $2.7 billion in 20-year net present value savings
and $412 million

Approved by DOD	in net annual recurring savings. Table 35 below provides a
summary of the financial aspects of the group's recommendations. However,
the group acknowledges that it incorrectly reported certain financial data
for its recommendation involving the Walter Reed Army Medical Center.
Based on our analysis, the revised estimates are shown as a note to table
35.

6 The medical group used a DOD-approved optimization model developed by
the Navy. Depending on the assumptions used in the model and level of
capacity reduction, the model provided a set of potential closure or
realignment alternatives for further consideration by decision makers.

7 Multiservice markets exist where two or more service military treatment
facilities are colocated geographically with shared beneficiary
populations. The medical group concluded that a substantial portion of
total inpatient excess capacity was in multiservice markets.

                                   Appendix X
                  Medical Joint Cross-Service Group Selection
                          Process and Recommendations

     Table 35: Financial Aspects of the Medical Joint Cross-Service Group's
                                Recommendations

                 Fiscal year 2005 constant dollars in millions

                                                         Net 
                                                      annual          20-year 
                  DOD                             recurring       Payback net 
                                                                      present 
                      One-time                                   period value 
               report          Net implementation (costs) or          (costs) 
Recommended                 (costs) or                          (years) or 
     actions     page  (costs) savingsa            savings           savingsb 

      Close Brooks City-Base, San     Med-6 ($325.3) ($45.9) $102.1 2 $ 940.7 
            Antonio, TX, by                                           
    relocating functions to Randolph                                  
            Air Force Base,                                           
    Wright-Patterson Air Force Base,                                  
              Lackland Air                                            
Force Base, Fort Sam Houston, and                                  
                Aberdeen                                              
             Proving Ground                                           

     Realign various activities by   Med-12 (12.9) 250.9 60.2 immediate 818.1 
         converting inpatient                                           
     services to clinics at Marine                                      
           Corps Air Station                                            
    Cherry Point, Fort Eustis, U.S.                                     
          Air Force Academy,                                            
    Andrews Air Force Base, MacDill                                     
            Air Force Base,                                             
Keesler Air Force Base, Scott Air                                    
              Force Base,                                               
    Naval Station Great Lakes, and                                      
               Fort Knox                                                

     Establish San Antonio Regional   Med-10 (1,040.9) (826.7) 129.0 10 476.2 
           Medical Center at                                            
     Fort Sam Houston, Brooke Army                                      
            Medical Center;                                             
    and realign basic and specialty                                     
            enlisted medical                                            
      training to Fort Sam Houston                                      

      Realign Walter Reed Army Medical    Med-4 (988.8) (724.2) 99.6 10 301.2 
                Center (all                                             
     tertiary care to Bethesda National                                 
               Naval Medical                                            
Center and primary and specialty care                                
                  to Fort                                               
                 Belvoir)c                                              

Realign McChord Air Force Base by relocating all Med-9 (1.1) 55.1 11.6
immediate 164.4 medical functions to Fort Lewis

     Realign various activities to create joint    Med-15 (73.9) (45.9) 9.2 7 
                     centers of                                             
      excellence for chemical, biological, and                              
                       medical                                              
research, development, and acquisition (at Fort                          
    Sam Houston, Walter Reed Army Medical Center-                           
Forrest Glen Annex, Wright-Patterson Air Force                           
      Base, Fort Detrick, and Aberdeen Proving                              
                       Ground)                                              

                  Total ($2,442.9) ($1,336.7) $411.7 $2,746.6

Source: GAO analysis of DOD data.

aThis represents net costs or savings within the 6-year implementation
period required to implement BRAC recommendations.

bDOD used a 2.8 percent discount rate to calculate net present value.

cThe medical group acknowledges inaccuracies in calculating its reported
estimates. Our analysis indicates that the revised estimated net annual
recurring savings are about $145 million, the payback year is 6 years, and
the 20-year net present value savings is about $831 million.

The payback period, or length of time for the savings to offset
implementation costs for these recommendations, ranged from immediately to
10 years. Four of the six recommendations are expected to

Appendix X
Medical Joint Cross-Service Group Selection
Process and Recommendations

result in nearly all of the expected savings-over 90 percent of the total
estimated 20-year net present value savings of about $2.7 billion, and of
the net annual recurring savings of about $411.7 million. Two of the six
recommendations have high one-time upfront costs-about $2 billion, or over
80 percent of the total one-time costs for the six recommendations.

Two multiservice market area recommendations-the establishment of the San
Antonio Regional Medical Center in Texas and realignment of the Walter
Reed Army Medical Center in Washington, D.C.-are ultimately expected to
(1) produce over 50 percent of the net annual recurring savings and (2)
incur most of the up-front costs for the recommendations as a whole. The
group's primary motivation for these recommendations was to transform the
existing medical infrastructure into premier modernized joint operational
medical centers. In the case of the Walter Reed Medical Center
recommendation, the group also justified the recommendation based on a
shift in the beneficiary population from the northern tier of the
Washington, D.C., area to the southern tier near Fort Belvoir, Virginia.

Another recommendation with substantial estimated net annual recurring
savings is the closure of the Brooks City-Base in Texas, which is
projected to achieve efficiencies in research, development, and
acquisition by relocating similar functions to a single location. However,
as discussed below, a significant portion of the savings from this as well
as other recommendations involve claimed military personnel savings, which
are somewhat uncertain. The recommendation that involves the downsizing of
inpatient facilities at nine locations is expected to achieve efficiencies
and reduce personnel as well as provide enhanced training opportunities
for medical personnel transferring to other locations.

The medical group included within its recommendations various realignments
that were described or partially justified as promoting jointness, such as
those in the centers of excellence for chemical, biological, and medical
research, development, and acquisition. Our review of the documentation
showed that the supporting analysis was not always clear with respect to
how these actions would result in jointness. For example, the group
anticipated that jointness would emerge from recommendations that
co-located but did not integrate research, development, and acquisition
functions among services at an installation. It appears that they
primarily will result in the co-locating of similar military services'
functional areas rather than creating integrated joint medical operations
with joint management structures. However, according to a DOD official,
the co-location of military services with similar functions on a

                                   Appendix X
                  Medical Joint Cross-Service Group Selection
                          Process and Recommendations

base will help foster jointness in the long term. Based on our analysis,
it is not obvious whether some of these proposed realignments will truly
result in joint military operations.

Issues Identified with 	Time did not permit us to assess the operational
impact of each of the medical group's recommendations, particularly where
operations proposed

Recommendations	for consolidations or realignments extend across
functional areas, geographical areas, or both. At the same time, we offer
a number of broadbased observations about some of the proposed
recommendations as they relate to military medical personnel savings,
payback periods, jointness, and medical wartime requirements that may
warrant further review by the BRAC Commission.

Military Medical Personnel Savings

Our analysis shows that military personnel savings account for about $201
million or nearly 50 percent of the group's estimated net annual recurring
savings. However, the amount of projected dollar savings is uncertain
because the medical group indicated that reductions in end strength are
not planned. Indirectly, some savings could occur based on the group's
expectation that medical personnel would be reassigned on an individual
basis to specific and varied locations, depending on where the need exists
for military medical specialists. In some cases, the group noted that
these military personnel reassignments could displace civilian and/or
contractor medical providers. When or to what extent these reallocations
would occur has not yet been determined. At the time of the group's
analysis, these specific moves had not been identified and thus the group
did not estimate costs related to such potential moves in its cost and
savings analysis.

Bundling of Recommendations

Some of the earlier proposed recommendations with lengthy or no payback
periods were integrated with ones having shorter paybacks, therefore
concealing the amount of time it would take for the savings to offset
costs. For example, the group developed a stand alone recommendation
colocating initial enlisted medical education and training to Fort Sam
Houston, Texas, which, by itself, had a payback period of 21 years.
However, the group later bundled it with the recommendation establishing
the San Antonio Regional Medical Center that downsized inpatient care at
Lackland Air Force Base also in Texas and expanded medical facilities at
nearby Fort Sam Houston. This recommendation had a payback period of 11
years. When the two recommendations were combined, the payback

                                   Appendix X
                  Medical Joint Cross-Service Group Selection
                          Process and Recommendations

period was determined to be 10 years. The common linkage of the two
recommendations is location, with the expectation that the enlisted medics
will benefit from the location of the Brooke Army Medical Center in Texas,
which has a trauma center suited for combat casualty training. Another
example is the initial realignment of medical research, development, and
acquisition functions at Brooks City-Base, which had no payback before DOD
combined this recommendation with other related recommendations to close
the base.

Future Wartime Medical Requirements

DOD's ongoing assessment of its future wartime medical requirements, as
mentioned earlier, will not be completed until after BRAC decisions are
finalized, following reviews by the BRAC Commission, the President, and
Congress; therefore, this assessment was not included in the medical
group's analysis. Without having such requirements available during the
BRAC process, it is difficult for DOD to identify the appropriate medical
infrastructure changes that are needed or to determine the appropriate
size of the military health care system. Also, the group recognized that
medical operations are changing with casualties rapidly moved to medical
facilities outside the theater of operations and that these changes may
affect the future sizing of medical forces.

Nevertheless, the group expressed belief that the current medical force
size was adequate to meet the requirements of the various war plans
despite the group's recommendations that will reduce system-wide excess
inpatient capacity by 622 beds.

Use of Veterans' Hospitals 	While the medical group examined the capacity
and proximity of Department of Veterans Affairs' (VA) hospitals to
existing military medical facilities in its analysis, it did not
coordinate with VA to determine whether military beneficiaries who
normally receive care at military medical facilities could also receive
care at VA hospitals in the vicinity. During the scenario development
phase, the group intended to develop a recommendation for a partnership
involving VA facilities, but group officials noted that the BRAC
nondisclosure agreements and the need to negotiate costs under such a
partnership made it difficult to seriously plan for VA involvement prior
to the announcement of the recommendations. However, a DOD official told
us that during the BRAC implementation phase, negotiations with VA at the
local levels are possible regarding the potential use of its services for
military beneficiaries in various locations, especially those locations
where DOD intends to eliminate inpatient care in

                                   Appendix X
                  Medical Joint Cross-Service Group Selection
                          Process and Recommendations

existing medical facilities.8 While the official told us that VA
involvement had the potential for providing services and benefiting the
department, another official added that the group's analysis indicated
that sufficient capacity exists, without VA support, within the private
sector to accommodate military beneficiaries in those locations where
inpatient care at the military facilities is being eliminated. However, we
were unable to verify the results of this analysis because the group did
not fully document its analysis.

Closure of the Uniformed Services University of the Health Sciences
Rejected by IEC

The medical group had initially developed a candidate recommendation to
close DOD's medical school, known as the Uniformed Services University of
the Health Sciences, which is located on the grounds of the National Naval
Medical Center in Bethesda, Maryland.9 The group had concluded that it was
more costly than alternative scholarship programs, and that the department
could rely on civilian universities to educate military physicians. The
group projected the closure will yield net annual recurring savings of
about $58 million, and 20-year net present value savings of approximately
$575 million. In a series of reports from 1995 through 2000, we also
concluded at the time that the university was a more costly way to educate
military physicians.10

However, late in the deliberative process, the IEC rejected this candidate
recommendation citing education as a core competency for the department
and therefore it was considered too risky to rely on the private sector to
provide this function. A DOD official indicated that with the
recommendation to realign Walter Reed Army Medical Center to Bethesda,
Maryland, it would be highly desirable to have a military medical college

8One of the medical group's recommendations includes disestablishing the
inpatient mission at 9 military treatment facilities. A VA hospital was
located near inpatient facilities at Andrews Air Force Base, Maryland;
Fort Eustis, Virginia; Fort Knox, Kentucky; Keesler Air Force Base,
Mississippi; MacDill Air Force Base, Florida; Naval Station Great Lakes,
Illinois; and Scott Air Force Base, Illinois.

9The medical group developed this candidate recommendation with the
knowledge of a specific provision of federal law (10 U.S.C. 2112a) that
could preclude closure of the university.

10GAO, Budget Issues: Budgetary Implications of Selected GAO Work for
Fiscal Year 2001, GAO/OCG-00-8 (Washington, D.C.: Mar. 31, 2000); GAO,
Budget Issues: Budgetary Implications of Selected GAO Work for Fiscal Year
2000, GAO/OCG-99-26 (Washington, D.C.: Apr. 16, 1999); and GAO, Military
Physicians: DOD's Medical School and Scholarship Program, GAO/HEHS-95-244
(Washington, D.C.: Sept. 29, 1995).

Appendix X
Medical Joint Cross-Service Group Selection
Process and Recommendations

associated with this medical facility in order for it to be a world-class
medical center. According to another official, DOD will need to make
investments in the university in order to elevate its status and attract
leading medical scholars who could make the university more competitive.

Appendix XI

Supply and Storage Joint Cross-Service Group Selection Process and
Recommendations

The Supply and Storage Joint Cross-Service Group followed the common
analytical framework established by the Office of the Secretary of Defense
(OSD) for reviewing the supply, storage, and distribution system within
DOD. The group initially produced five recommendations that were presented
to the Infrastructure Steering Group (ISG) and the Infrastructure
Executive Council (IEC). Three of the five recommendations were merged
into one recommendation by the IEC. If adopted, the three approved
recommendations are projected to generate about $5.6 billion in estimated
20-year net present value savings and $406 million in net annual recurring
savings for the department with an immediate payback (i.e., time required
to recoup up-front investment costs) on the cost of implementing these
recommendations. While the number of recommendations is small, each
encompasses multiple realignment actions of workloads affecting many
locations. Our analysis shows that the anticipated savings would result
primarily from business process reengineering-expanded use of
performance-based logistics1-, infrastructure and inventory reductions,
and reduced civilian personnel costs. We identified a number of issues
associated with several recommendations that may warrant additional
attention by the BRAC Commission. The group encountered some challenges in
obtaining accurate and consistent certified data, but the DOD Inspector
General and the military service audit agencies, which performed audits of
the data, ultimately concluded that the data were sufficiently reliable
for use during the BRAC process.

Organization and Focus

The supply and storage group consisted of six senior-level principal
members from the logistics directorates for each service, the Defense
Logistics Agency (DLA), and the Joint Chiefs of Staff, and was supported
by staff from these organizations.2 The Director, DLA, chaired the group,
following the retirement of the original chairman from the Joint Staff.
The group's overarching goal was to identify potential closures,
realignments, or both that would enhance economies and efficiencies in
operations as traditional military forces and logistics processes become
more joint and increasingly take on expeditionary characteristics.

1 Performance-based logistics is defined as the purchase of weapon system
sustainment as part of an affordable integrated weapon system package
based on output measures, such as weapon system availability, rather than
input measures, such as parts and technical services.

2 At OSD, the ISG and the IEC provided overall coordination and direction
to the DOD-wide process.

                                  Appendix XI
                     Supply and Storage Joint Cross-Service
                          Group Selection Process and
                                Recommendations

Framework for Analysis

The group organized its BRAC efforts around the three core logistics
functions of supply, storage, and distribution. These functions are
inherent in the military services' operations as well as for DLA, whose
mission is to provide wholesale-level support in these functions for the
services in common supply classes. In collecting and analyzing data to
formulate its recommendations, the group sought to assess the supply and
storage infrastructure in the following four distinct activity areas: (1)
military service and DLA inventory control points (2) defense distribution
depots, (3) defense reutilization and marketing offices and (4) other
activities such as installation-level supply operations. As with other
military services and joint cross-service groups, capacity and military
value analyses served as starting points for the group's analyses. While
the group initially tried to analyze both the wholesale3 and retail supply
and storage activities, it later terminated most retail-level efforts
because of difficulties in collecting reliable data and a desire by the
group's principals to not impact the retail support to operational and
other deploying units. The DOD Inspector General and service audit
agencies performed an important role in ensuring the accuracy of data used
in these analyses through extensive audits of data gathered at various
locations.

Capacity Analysis	To form the basis for its analysis, the group developed
metrics in each of the functional areas (supply, storage, and
distribution) to measure capacity and subsequently sought to collect
certified data linked to these metrics from various defense activities
whose missions resided within these functional categories. The group
developed 14 separate reporting metrics within these categories that
included, for example, special indoor storage space and technical labor
work hours, and measured excess capacity under normal demand as well as
under surge conditions of 10 and 20 percent. Because of its general
inability to collect reliable retail-level data and a desire not to impact
operational support to deploying units whose support comes from the retail
area, the group dropped this area, with one

3 DOD maintains supply within a two-tiered system typically referred to as
the wholesale and retail levels. Wholesale generally includes activities
that procure, hold, and manage materiel not specific to individual
operating units, and is also referred to as "above installation
activities." Retail refers to activities that support organizational level
needs for supplies and materiel and is also referred to as "installation
and below activities."

                                  Appendix XI
                     Supply and Storage Joint Cross-Service
                          Group Selection Process and
                                Recommendations

exception,4 from further consideration in the succeeding analyses leading
to recommended actions.

The group's capacity analysis showed that excess capacity5 exists, even
when surge factors were considered, within three of the four supply and
storage activity areas it examined. As shown in table 36, the excesses
ranged from 20 percent to 75 percent under normal demand conditions across
various capacity metrics in the functional areas, with the excesses
somewhat less under surge conditions.

      Table 36: Excess Capacity Identified by the Supply and Storage Joint
               Cross-Service Group Percentage of excess capacity

     Functional/activity                                              
                                                       Normal 10           20 
           category              Capacity metric       demand percent percent 
                                                              surge     surge 
Supply/inventory control  Purchasing labor (FTE)a       29      22      14 
            points              Supply labor (FTE)         35      29      22 
                              Technical labor (FTE)        75      72 
                             Work space (square feet)      47      42 
         Storage and         Regular covered storage       32      25      19 
        distribution/              (cubic feet)                       
     defense distribution    Special covered storage                          
            depots          (cubic feet) Open storage   37 43   31 38   24 32
                                  (square feet)                       
                              Distribution capacity        39      33 
                                (number of loading                    
                                      bays)                           
     Supply and storage/      Wage grade labor (FTE)       46      40      35 
    defense reutilization    Supply labor (FTE) Work    40 53   34 48   28 44 
    and marketing offices      space (square feet)                    
                             Regular covered storage       57      52 
                                   (cubic feet)                       
                             Special covered storage       20      12 
                                   (cubic feet)                       
                            Open storage (square feet)     58      54 

Source: Supply and Storage Joint Cross-Service Group.

a FTEs are full-time equivalents and are used as measures of work hours
performed. One FTE is equivalent to 2,080 hours of work per year.

4 Limited retail-level data were collected with the cooperation of the
Industrial Joint Cross-Service Group to support one recommendation that
contained some service retail supply consolidations with DLA wholesale
supply activities.

5 The group defined excess capacity as the difference between current
capacity and current usage. Under increased surge conditions, excess
capacity will be reduced.

                                  Appendix XI
                     Supply and Storage Joint Cross-Service
                          Group Selection Process and
                                Recommendations

According to the group's staff, its recommendation regarding restructuring
of defense distribution depots, if approved and implemented, is expected
to reduce current covered storage of about 51 million square feet (both
regular and special) by over 50 percent, or about 27 million square feet.
In addition, the recommendation regarding inventory control points is
expected to increase infrastructure by about 4,700 square feet because the
inventory control points would be absorbing more space than they would be
vacating. The group has no recommendations that would affect the capacity
of DLA's defense marketing and reutilization offices.

Military Value Analysis	The supply and storage group's assessment of
military value, like its excess capacity assessment, focused on the same
three core logistics functions of supply, storage, and distribution. By
linking its military analysis directly to OSD's four military selection
criteria required by the BRAC legislation, the group established a sound
basis for developing its recommendations. As shown in table 37, the group
developed a weighting system for the military value criteria with the
first and third criteria having relatively larger weights, or importance,
than the remaining two criteria.

Table 37: Supply and Storage Joint Cross-Service Group Military Value
Criteria Weights

                             Figures in percentages

                            Military value criteria

1. The current and future mission capabilities and the impact on
operational readiness of the total force of the Department of Defense,
including impact on joint warfighting, training, and readiness.

2. The availability and condition of land, facilities, and associated
airspace in (including training areas suitable for maneuver by ground,
naval, or air forces throughout a diversity of climate and terrain areas
and staging areas for the use of the Armed Forces in homeland defense
missions in) at both existing and potential receiving locations.

3. The ability to accommodate contingency, mobilization, surge, and 35
future total force requirements at both existing and potential receiving
locations to support operations and training.

4. The cost of operations and the manpower implications. 10

                                   Total 100

Source: DOD and Supply and Storage Joint-Cross-Service Group.

Note: The system of weights provided a basis for assigning relative value
to data collected and tabulated across each military value dimension.

                                  Appendix XI
                     Supply and Storage Joint Cross-Service
                          Group Selection Process and
                                Recommendations

As with the capacity analysis, the group's assessment of military value
included development of attributes and metrics in each of the core
functional areas to measure military value, and it subsequently sought to
collect certified data linked to these metrics from various defense
activities whose missions resided within these categories. The group
developed 55 individual metrics within the three functional areas,
addressing information such as the percentage of demand for stocked items
and cost of operations per person. The attributes and metrics were linked
back to the military value selection criteria, as illustrated in figure
18.

Figure 18: Selected Attributes, Metrics, and Data Questions Used to Assess
Military Value of Supply and Storage Activities

Source: GAO analysis of Supply and Storage Joint Cross-Service Group data.

aThe BRAC military value criteria are the first four BRAC selection
criteria.

bMilitary value attributes are characteristics of each criterion. Four of
28 military value attributes used by the group.

cMilitary value metrics are measures for the attributes. Four of 55
military value metrics used by the group.

dFour of 55 military value data call questions used by the group. Many of
these questions have multiple parts.

Using certified data collected during the BRAC process and applying the
weighting system, the group developed military value scores and rankings
for 16 inventory control points, 19 defense distribution depots, and 67
defense reutilization and marketing offices. As with the capacity
analysis, the group was generally unable to develop sufficient reliable
data at the

                                  Appendix XI
                     Supply and Storage Joint Cross-Service
                          Group Selection Process and
                                Recommendations

retail level to complete a military value analysis at that level. In many
respects, the military value methodology for this round was comparable to
that used in the 1995 BRAC round, particularly for DLA activities. In both
BRAC rounds, the military value ranking of an activity played a
predominant role in formulating recommendations.

DOD Inspector General's and Service Audit Agencies' Roles in the Process

The DOD Inspector General and the service audit agencies played important
roles in helping to ensure that the data used in the group's data analyses
were certified and properly supported and that decision-making models
(e.g., military value and optimization) were logically designed and
operating as intended. Through extensive audits of the data collected from
field activities during the process, these audit agencies notified the
group when they identified data discrepancies for follow-on corrective
action. While the process for detecting and correcting data errors was
quite lengthy and challenging, the audit agencies ultimately deemed the
supply and storage-related data to be sufficiently reliable for use in the
BRAC process.

Identification and Assessment of Alternate Scenarios and Selection of
Recommendations

The Supply and Storage Joint Cross-Service Group did not have accurate and
complete capacity and military value data when it initially started
developing potential closure and realignment scenarios and, therefore, had
to rely on incomplete data, as well as military judgment based on the
group's collective knowledge of the supply and storage area, to formulate
its initial closure and realignment scenarios for evaluation. Although the
data improved as additional information was requested and received from
field locations, the lack of useable data initially limited the use of an
optimization model to help identify and analyze scenarios. As time
progressed, however, the group obtained the needed data, for the most
part, to inform and support its scenarios. The DOD Inspector General
validated the data. The group also focused on a number of OSD supplied
transformational options, as outlined below, to guide its efforts in the
recommendation development process:

o 	Establishing a consolidated multi-service supply, storage, and
distribution system focused on creating joint activities in areas with
heavy DOD concentration.

o  Privatizing the wholesale storage and distribution processes.

                                  Appendix XI
                     Supply and Storage Joint Cross-Service
                          Group Selection Process and
                                Recommendations

o 	Migrating oversight and management of all service depot-level
reparables to a single DOD agency/activity.6

o 	Establishing a single inventory control point within each service or
consolidate into a joint activity.

o 	Examining the effect of reducing functions by 20, 30, and 40 percent
from the existing baseline, or reducing excess capacity by an additional 5
percent beyond the analyzed excess capacity.

The group developed a total of 51 scenarios based on these
transformational options. With the maturation of the data and the
application of the COBRA model to estimate costs and savings, along with
military judgment, the group was able to narrow its proposals to five
candidate recommendations that were forwarded to the ISG and ultimately
approved by the IEC. Further integration of three of these recommendations
into a single recommendation left the group with three approved
recommendations.

                                Recommendations
                                Approved by DOD

The group's recommendations are projected to produce substantial
savings-about $406 million in estimated net annual recurring savings and
about $5.6 billion in estimated net present value savings for DOD over the
next 20 years. All are realignment actions, even though one of the
recommended actions will close two defense distribution depots at
Columbus, Ohio, and Texarkana, Texas and another one will close four
inventory control points at Fort Huachuca, Arizona; Fort Monmouth, New
Jersey; Rock Island, Illinois; and Lackland Air Force Base, Texas, while,
at the same time, opening a new one at Aberdeen Proving Ground, Maryland.
The group's recommendations also helped facilitate the closures of Fort
Monmouth, New Jersey, and Red River Army Depot, Texas, both of which are
reported in the Army's BRAC report. Table 38 provides a summary of the
financial aspects of the group's three DOD-approved recommendations.

6 Depot level reparables are supply items that are designed to be repaired
at the depot level.

                                  Appendix XI
                     Supply and Storage Joint Cross-Service
                          Group Selection Process and
                                Recommendations

Table 38: Financial Aspects of the Supply and Storage Joint Cross-Service
                            Group's Recommendations

                 Fiscal year 2005 constant dollars in millions

                                                 Net                  20-year 
                                                 annual              
                                                 recurring   Payback      net 
                                                                      present 
                   DOD   One time Net             (costs)               value 
                  report          implementation    or        period  (costs) 
  Recommendations  page   (costs) (costs) or       savings   (years)       or 
                                  savingsa                           savingsb 
  Realign supply, S&S-13                            $203.2 immediate          
storage, and          ($192.7)       $1,047.3                     $2,925.8
distribution                                                      
    management                                                       
      Realign                                                                 
     inventory    S&S-7                    369.8     159.3 immediate 
  control points                                                     
        and               (127.0)                                     1,889.6
    consolidate                                                      
    depot-level                                                      
     reparable                                                       
    procurement                                                      
    management                                                       
      Realign                                                                 
management of  S&S-5                    333.7      43.8 immediate   $735.9
      select                (6.4)                                    
    commodities                                                      
       Total             ($326.1)       $1,750.8    $406.3           $5,551.3 

Source: GAO analysis of DOD data.

aThis represents net cost or savings within the 6-year implementation
period required to implement BRAC recommendations.

bDOD used a 2.8 percent discount rate to calculate net present value.

Most of the projected net annual recurring savings-about $291 million or
nearly 72 percent of the total-are expected to result from business
process reengineering improvements in the form of expanded use of
performance-based logistics and reductions to duplicate inventory. Most of
the remaining net annual savings are expected to materialize from
reductions to infrastructure costs at the wholesale supply and storage
level (about $100 million annually) and from reductions in civilian
personnel costs (about $68 million annually), with adjustments of about
$54 million in annual recurring costs to reflect additional contract
support costs. Further, the recommendations are expected to have immediate
paybacks with relatively low up-front costs and savings over the 6-year
implementation period. We believe that implementation of these
recommendations could result in more efficient operations within DOD, and
we consider the recommendation involving DLA management of the inventory
control points and depot-level reparables to be transformational because
it advances DOD's goal of having one DOD activity manage these activities,
although, as discussed later, the full magnitude of savings likely to be
realized is somewhat uncertain.

The recommendation regarding the realignment of supply, storage, and
distribution management creates four support regions across the country.
Each region will have one strategic distribution site that will supply the
region and multiple forward distribution points that will solely support

Appendix XI
Supply and Storage Joint Cross-Service
Group Selection Process and
Recommendations

industrial customers, such as maintenance depots, shipyards, and air
logistics centers. The strategic distribution sites are located at
Susquehanna, Pennsylvania; Warner Robins, Georgia; Oklahoma City,
Oklahoma; and San Joaquin, California. It is also designed to realign
service retail supply and storage functions along with personnel and
infrastructure for these industrial customers in an "in-place, no-cost
transfer" to DLA. This recommendation supports the closures of the defense
distribution depots at Columbus, Ohio, and Texarkana, Texas, and realigns
each of the remaining 17 defense distribution depots.

The recommendation regarding the realignment of the inventory control
points transfers certain inventory control point functions, such as
contracting, budgeting and inventory management, to DLA and allows further
consolidation of service and DLA inventory control points by the supply
chains they manage.7 In addition, it supports the movement of the
management of essentially all service consumable items8 and the
procurement management and related support functions for the procurement
of essentially all depot level reparables from the military services to
DLA. This recommendation realigns all 16 of the current DLA and service
inventory control points and closes 4 through consolidation- Fort
Huachuca, Arizona; Fort Monmouth, New Jersey; Rock Island, Illinois; and
Lackland Air Force Base, Texas-while opening a new inventory control point
at Aberdeen Proving Ground, Maryland. The recommendation also supports the
Army's closure of Fort Monmouth by moving supply and storage functions to
other locations.

The recommendation regarding the realignment of commodity management
disestablishes the wholesale supply, storage, and distribution functions
within the department for all tires; packaged petroleum, oils, and
lubricants; and compressed gases used by DOD. As a result, these
commodities will be supplied directly by private industry, which will free
up space and personnel used to manage these items. It realigns all of the
remaining defense distribution depots by disestablishing all storage and
distribution for the commodities.

7 The Defense Supply Center Columbus Ohio, manages the maritime and land
supply chain. The Defense Supply Center Richmond Virginia, manages the
aviation supply chain, and the Defense Supply Center Philadelphia
Pennsylvania, manages the troop support supply chain.

8 Consumable items are either not repairable or not economically
repairable.

                                  Appendix XI
                     Supply and Storage Joint Cross-Service
                          Group Selection Process and
                                Recommendations

Issues Identified with Approved Recommendations

Although time did not permit us to fully assess the operational impact of
each recommendation, particularly where operations proposed consolidation
across multiple and varied locations, available information suggests these
recommendations have the potential for more efficient operations within
DOD. At the same time, there are some issues we identified that we believe
the BRAC Commission may wish to consider during its review process because
of potentially overstated savings estimates. In this regard, the supply
and storage group claimed savings for future cost avoidances for
sustainment and facilities' recapitalization related to the facilities'
space that is expected to be vacated under the recommended actions.
However, as discussed below, it is uncertain whether these savings will
actually materialize if these facilities are not closed and remain
open-even with reduced usage of the space. Additionally, the group did not
develop recommendations for several areas within the scope of its
responsibility that may have further contributed to the accomplishment of
DOD's BRAC objectives, such as additional consolidations in DLA and
service inventory control points.

Estimated Savings Related to Business Process Improvements Are Uncertain

The largest portion of the supply and storage group's savings-about $291
million out of total net annual recurring savings of $406 million- comes
from business process reengineering improvements in the form of expanded
use of performance-based logistics and reductions to duplicate inventory.
According to supply and storage staff, these savings accrue from reduced
contract prices because DLA will have increased buying power since it is
responsible for purchasing many more items that had been purchased by each
of the services. In addition, savings accrue from increased use of
performance-based agreements,9 a key component of performance-based
logistics. The group estimates DLA can save 2.8 cents on each contract
dollar placed on performance-based agreements. In addition, savings come
from reductions in the amount of stock that must be held in inventory.
Supply and storage staff said that the savings component for the cost to
hold this inventory has three parts: (1) cost of money, (2) cost of stock
losses due to obsolescence, and (3) cost of storage. The group estimates
that together these three factors save about 17 percent of the estimated
value of the acquisition cost of the stock that is no longer

9 Performance-based agreements are the negotiated agreements between the
major stakeholders that formally document the performance and support
expectations and resources to achieve the desired outcome.

                                  Appendix XI
                     Supply and Storage Joint Cross-Service
                          Group Selection Process and
                                Recommendations

required to be held in inventory. Although the group had some supporting
documentation for its assumptions, time did not allow us to fully evaluate
the documentation. Nevertheless, the full magnitude of savings likely to
be realized will depend on how well the actions, if approved, are
implemented in line with the assumptions made.

Estimated Savings Related to Vacated Facility Space May Be Overstated

All of the supply and storage group's recommendations taken together show
significant projected savings from expected reductions to excess or
unnecessary infrastructure. According to the group's estimates, it is
claiming BRAC savings on about 27 million square feet of vacated space- an
estimated savings of about $100 million annually or about 25 percent of
the group's total net annual recurring savings. In developing its costs
and savings estimates, the group assumed that all of the excess
infrastructure that was made possible by the recommendations would
generate BRAC savings because it was further assumed that the
infrastructure would no longer be used and therefore would not require
sustainment and recapitalization funding. However, we believe these
assumptions are not necessarily valid because it is not clear that the
freed-up infrastructure will be eliminated and could potentially be
occupied by other users following the BRAC process. At present the group
does not have plans for this space. Under the BRAC process, if these
vacated facilities or portions thereof are reoccupied by other defense
organizations, there is a corresponding cost for this reoccupation.
Likewise, additional BRAC costs are required for facilities that remain
empty to minimally maintain them, and costs are incurred if buildings are
demolished. Supply and storage officials told us they were aware of this
issue and said that their goal is to vacate as much space as possible by
re-warehousing inventory and by reducing personnel spaces, but they do not
have a specific plan for what will happen to the space once it is vacated.
In addition, until these recommendations are ultimately approved and
implemented, it will not be known exactly how much space is available or
how this space will be disposed of or utilized. As a result, it is unclear
as to how much of the estimated $100 million net annual recurring savings
will actually occur.

Potential for Additional The recommendation that was approved by the IEC
to consolidate some

Savings Exists	service inventory control point functions within DLA will
move about 1,345 of the services' staff performing inventory control point
functions to DLA and is estimated by the supply and storage group to save
about $1.9 billion over the next 20 years. However, the group also
analyzed a scenario that would have moved more inventory control point
functions and more than

Appendix XI
Supply and Storage Joint Cross-Service
Group Selection Process and
Recommendations

6,500 service staff to DLA and was estimated by the group to save $2.9
billion over the same 20-year period. The latter scenario would leave
nearly 3,900 service technical and engineering support personnel of the
more than 10,300 service staff at existing service inventory control
points. Senior-level principal members of the supply and storage group
consider the technical and engineering support personnel positions to be
more closely related to weapon system readiness and support to the
warfighter than other inventory control point functions, such as
contracting, budgeting, and inventory management, which are being
transferred to DLA. These officials were not willing to suggest
transferring the technical positions to DLA because of the perceived
additional risk involved of not being able to supply the critical parts to
the warfighter when needed. Therefore, they approved the recommendation
that generated less savings, but also less risk to weapon system readiness
and moved fewer inventory control point functions and fewer service staff
to DLA. The Commission may wish to further examine the potential for
greater savings regarding the transfer of more inventory control point
functions versus the potential risk of not being able to supply critical
parts when needed.

The group also did not pursue the development of recommendations regarding
the defense reutilization and marketing office activities, even though
considerable excess capacity exists, as shown in table 36, in that area.
Group officials told us that these activities, which are managed by DLA,
are considered follower organizations10 that are currently undergoing an
extensive A-7611 initiative outside the BRAC process that is expected to
either close or consolidate several activities and reduce staff levels at
others. DLA data indicate that 61 of the 67 reutilization and marketing
office activities analyzed by the supply and storage group are involved in
the effort and that the agency expects to save about $36 million through
2011 with the A-76 effort.

10 Follower organizations exist only because there is a larger
organization that they serve at their locations.

11 A-76 is competitive sourcing where the federal government determines
whether functions described as "commercial in nature" are best provided by
the private sector, by government personnel, or by another agency through
a fee-for-service agreement.

Appendix XII

Technical Joint Cross-Service Group Selection Process and Recommendations

The Technical Joint Cross-Service Group followed the common analytical
framework established by the Office of the Secretary of Defense (OSD) in
reviewing its functions and facilities. The group included in its report
13 recommendations that it projects would generate about $2.2 billion in
20year net present value savings for DOD. These 13 recommendations
incorporate a total of 6 closures, 62 realignments, and 1 disestablishment
action. Additionally, the technical group transferred parts of nine
recommendations to other joint cross-service groups or military services,
which combined with other actions resulting in three additional closures.1
The majority of the projected annual recurring savings result from
eliminating civilian and contractor personnel and vacating leased space.
The recommendations have payback periods-the time required for savings to
offset closure and realignment costs-ranging from 1 to 26 years. Limited
progress was made to foster greater jointness and transformation. The DOD
Inspector General and the military service audit agencies, which performed
audits of the data used in the process, concluded that the data were
sufficiently reliable for use during the BRAC process. While available
data supporting the recommendations suggest their implementation should
provide for more efficient operations within the department, we believe
there are some issues that the BRAC Commission may wish to examine more
closely during its review process.

Organization and Focus

The technical group was chaired by the Director, Defense Research and
Engineering; it consisted of senior members from each military department
and the Joint Chiefs of Staff.2 The group created five subgroups to
evaluate the technical facilities: (1) Command, Control, Communications,
and Computers, Intelligence, Surveillance, and Reconnaissance (C4ISR); (2)
Air, Land, Sea, and Space Systems; (3) Weapons and Armaments; (4)
Innovative Systems; and (5) Enabling Technologies. In addition, the group
also created a Capabilities Integration Team and an Analytical Team to
support the efforts of the subgroups.

1 These additional closures are Fort Monmouth, New Jersey, which is
included in the Army section of DOD's report; Naval Support Activity
Corona, California, which is included in the Navy section; and Brooks
City-Base, Texas, which is included in the Medical Joint Cross-Service
Group section.

2 At OSD, the Infrastructure Steering Group (ISG) and the Infrastructure
Executive Council (IEC) provided overall coordination and direction to the
DOD-wide process.

                                  Appendix XII
                      Technical Joint Cross-Service Group
                     Selection Process and Recommendations

Framework for Analysis

The technical group established two principles to guide its analysis and
recommendation development: (1) provide efficiency of operations by
consolidating technical facilities to enhance synergy and reduce excess
capacity and (2) maintain competition of ideas by retaining at least two
geographically separated sites. The group analyzed three functional areas
within DOD: research, development and acquisition, and test and
evaluation.3 It focused its analysis of the 3 functions across 13
technical capability areas-air platforms; battlespace environments;
biomedical; chemical and biological defense; ground vehicles; human
systems; information systems; materials and processes; nuclear technology;
sea vehicles; sensors, electronics, and electronic warfare; space
platforms; and weapons and armaments.4 Each of the military services and
some defense agencies perform work in the functions and technical
capability areas. The group developed a strategic framework based on its
two principles that focused on establishing multifunctional and
multidisciplinary centers of excellence,5 which served as the starting
point for developing scenarios. These strategy-driven scenarios were later
confirmed by capacity and military value data and military judgment. The
DOD Inspector General and service audit agencies performed an important
role in ensuring the accuracy of data used in these analyses through
extensive audits of data gathered at various locations.

Capacity Analysis	The technical group's analysis of DOD's technical
infrastructure across each of the 3 functions and 13 technical capability
areas resulted in a total of 39 "technical facility categories" around
which the group focused its analysis.6 The group used two capacity
measures-work years, as quantified by the number of full-time staff, and
the number of test hours-

3 Test ranges were in the technical group's domain; open-air ranges were
analyzed by the Education and Training Joint Cross-Service Group with
input from the technical group.

4 The 13 technical capability areas are based on the Defense Technology
Area Plan 2003, which lists 12 areas; however the technical group
separated ground vehicles and sea vehicles into two technical capability
areas for subgroup review and analysis.

5 Multifunctional refers to combining activities across the three
functions of research, development and acquisition, and test and
evaluation. Multidisciplinary refers to combining activities across 1 or
more of the 13 technical capability areas.

6 The group defined a technical facility category as a collection of
people and physical infrastructure that performs a technical function (or
functions) in a specific technical capability area at a specific location.

Appendix XII
Technical Joint Cross-Service Group
Selection Process and Recommendations

and subsequently collected certified data on these measures from the
technical facilities performing work in each of the technical facility
categories. Excess capacity was defined as the difference between current
usage plus a surge factor and peak capacity. Current usage was defined as
the average usage for fiscal years 2001 through 2003, and peak capacity
was defined as the maximum capacity for the measure. The group set the
surge factor at 10 percent of current capacity, based on military judgment
of how the technical community has approached surge in the past.

The group calculated excess capacity for each of the 39 technical facility
categories; however, the aggregated data provide more insight into the
amount of excess capacity. Table 39 shows the excess capacity that the
technical group found through its analysis.

Table 39: Excess Capacity Identified by the Technical Joint Cross-Service
Group

                             Figures in work years

                                                                   Percentage 
                                    Peak Current usage     Excess   of excess 
                     Function   capacity   plus surge   capacity     capacity 
                     Research     31,168         28,069     3,099        11.0 
              Development and    106,944        101,208     5,736 
                  acquisition                                     
          Test and evaluation     44,852         40,319     4,533        11.2 
                        Total    182,964        169,596    13,368 

Source: Technical Joint Cross-Service Group.

The group reported that the current required capacity, including surge,
across all technical capability areas and functions is 169,596 work years.
The group found the equivalent of 13,368 work years, or 7.9 percent,
excess capacity across the three functions. The group reports that its
recommendations eliminate approximately 3,000 work years. Based on these
calculations, approximately 6 percent excess capacity would remain if all
of the group's recommended actions are implemented. The work year
reductions include the reductions made through the technical group's 13
recommendations. The work year reductions do not include reductions in
technical excess capacity through the closure of Fort Monmouth, New
Jersey, and Brooks City-Base, Texas, for example, which are included in
the Army and Medical Joint Cross-Service Group recommendations,
respectively.

                                  Appendix XII
                      Technical Joint Cross-Service Group
                     Selection Process and Recommendations

Military Value Analysis	As with capacity analysis, the technical group's
assessment of military value included an assessment of the technical
infrastructure across the 39 technical facility categories. The group
weighted each of the four military value criteria based on the importance
of the criterion to the technical function. The group used the same
weights for the research and development and acquisition functions, but
different weights for the test and evaluation function due to differences
in the type of work conducted at these facilities. Table 40 shows the
weights for the three functions.

Table 40: Technical Joint Cross-Service Group Military Value Criteria
Weights

                             Figures in percentages

                                        Research, development and acquisition

Test and evaluation

                            Military value criteria

1. The current and future mission capabilities and the impact on
operational readiness of the total force of the Department of Defense,
including impact on joint warfighting, training, and readiness.

53

2. The availability and condition of land, facilities, and 12
associated airspace (including training areas suitable for
maneuver by ground, naval, or air forces throughout a
diversity of climate and terrain areas and staging areas
for the use of the Armed Forces in homeland defense
missions) at both existing and potential receiving
locations.

3. The ability to accommodate contingency, 25 mobilization, surge, and
future total force requirements at both existing and potential receiving
locations to support operations and training.

4. The cost of operations and the manpower 10 implications.

Total 100

Source: DOD and the Technical Joint Cross-Service Group.

Note: The system of weights provided a basis for assigning relative value
to data collected and tabulated across each military value dimension.

The group developed attributes and metrics across each of the four
military value criteria to measure military value and subsequently
collected certified data for these capacity measures from the technical
facilities performing work in each of the technical facility categories.
The group examined the capabilities of each technical facility based on
five attributes:

Appendix XII
Technical Joint Cross-Service Group
Selection Process and Recommendations

o  people, which measures intellectual capital;

o 	physical environment, which measures special features of technical
facilities;

o 	physical structures and equipment, which measure the presence of
physical structures unique within DOD and the value, condition, and use of
these structures;

o 	operational impact, which measures the output of the three functional
areas (research, development and acquisition, and test and evaluation);
and

o 	synergy, which measures working on multiple technical capability areas
and functions and jointness.

The technical group developed weights for the 5 attributes that were
applied to each of the criteria and 30 metrics divided among the 5
attributes. While the group allowed the evaluative weights for the metrics
to vary across its subgroups, it used the same weights for the five
attributes. The evaluative weight assigned to attributes varied among the
three functions because a particular attribute could have greater
importance for one function than another. For example, the technical group
weighted the people attribute for criterion 1 at 17 percent of the total
military value score for research, 13 percent for development and
acquisition, and 16 percent for test and evaluation. While the attribute
weights were the same for activities across subgroups, the metric weights
varied by subgroup. For example, the Air, Land, Sea, and Space Systems
subgroup weighted the patents, publications, and awards metric of
criterion 1 for the research function at 30 percent of the total for the
people attribute, while the Weapons and Armaments subgroup weighted the
same metric at 18 percent.

Figure 19 provides an example of the technical group's military value
attributes, metrics, data sources, and their link to the four BRAC
military value criteria.

                                  Appendix XII
                      Technical Joint Cross-Service Group
                     Selection Process and Recommendations

Figure 19: Selected Attributes, Metrics, and Data Questions Used to Assess
                     Military Value of a Technical Facility

Source: GAO analysis of Technical Joint Cross-Service Group data.

aThe BRAC military value criteria are the first four BRAC selection
criteria.

bMilitary value attributes are characteristics of each criterion. The
technical group used a total of five military value attributes.

cMilitary value metrics are measures for the attributes. The technical
group used a total of 30 military value metrics.

dThe technical group used a total of 44 data call questions.

All technical facilities were analyzed using the technical group's
military value approach, regardless of whether the recommendation ended up
with the technical group's 13 recommendations or in another services' or
joint cross-service groups' recommendations. For example, part of the
Army's recommendation to close Fort Monmouth relocates the information
systems research and development and acquisition to Aberdeen Proving
Ground, Maryland. The technical group followed the same process in
gathering data and calculating a military value score for these functions
as they did all other technical functions.

DOD Inspector General's The DOD Inspector General and the service audit
agencies played and Service Audit Agencies' important roles in ensuring
that the data used in the technical group's data Role in the Process
analyses were certified. To determine the validity of the group's data,
the

DOD Inspector General examined (1) whether the group used certified data

and created an adequate audit trail for capacity and military value
analyses

and (2) whether the group created an adequate audit trail for inputting
data

into the Cost of Base Realignment Actions (COBRA) model. The DOD

                                  Appendix XII
                      Technical Joint Cross-Service Group
                     Selection Process and Recommendations

Inspector General found that certified data were used for the group's
capacity and military value analyses, and there was an adequate audit
trail for the capacity and military value analyses, and COBRA input data.
Through extensive audits of the data collected from technical facilities
during the process, the service audit agencies notified the technical
facility of identified data discrepancies and the technical facility was
to take corrective action. While the process for detecting and correcting
data errors was quite lengthy and challenging, the DOD Inspector General
and service audit agencies deemed the technical data to be sufficiently
reliable for use in the BRAC process.

Identification and Assessment of Alternate Scenarios and Selection of
Recommendations

The technical group used its strategic framework to identify 69 potential
closure or realignment scenarios and then select 23 candidate
recommendations. The group confirmed its scenarios and recommendations
with its capacity and military value data and military judgment. In most
cases, each scenario that did not become a candidate recommendation was
one of several alternatives for moving the same work to different
locations. The ISG and IEC accepted 22 of the technical group's candidate
recommendations. One recommendation, which realigned technical functions
at Naval Support Activity Corona, California, to several different bases,
was disapproved by the ISG because the Navy wanted to keep these functions
together, according to a technical group official. The official said that
the ISG allowed the Navy to construct a different recommendation, which
moved these functions to Naval Air Station Point Mugu, California, and
this recommendation was approved and is presented with the Navy's
recommendations.7 Nine of the group's recommendations were transferred to
the services or other joint cross-service groups, which left the technical
group with 13 recommendations. The 13 recommendations included in the
group's report result in a total projected net savings of $2.2 billion
over 20 years, with net annual recurring savings of $265.5 million per
year and payback periods ranging from 1 to 26 years. Personnel savings
account for over half of the group's projected annual recurring savings,
three-quarters of which comes from civilian personnel savings. While
available data supporting the recommendations suggest

7 The group also provided a recommendation to relocate Naval Support
Activity Corona to March Air Reserve Base. According to technical group
officials, when the closure of Naval Support Activity Corona is included
in the data, both their original recommendation and alternative had
shorter payback periods and higher 20-year net present value savings than
the Navy's final recommendation.

                                  Appendix XII
                      Technical Joint Cross-Service Group
                     Selection Process and Recommendations

their implementation should provide for more efficient operations within
the department, we believe there are some issues that the BRAC Commission
may wish to examine more closely during its review process.

Recommendations 	The technical group's proposed recommendations result in
a total projected net savings of $2.2 billion over 20 years, with net
annual recurring

Approved by DOD	savings of $265.5 million per year. Table 41 provides a
summary of the financial aspects of the group's recommendations, most of
which are realignment actions.

Table 41: Financial Aspects of the Technical Joint Cross-Service Group's
Recommendations

                 Fiscal year 2005 constant dollars in millions

                                                         Net         
                                                      annual          20-year 
                                                  recurring  Payback      net 
                                                                      present 
                  DOD     One-time Net                                  value 
                  report           implementation (costs) or  period  (costs) 
    Recommended    page      costs (costs) or        savings (years)       or 
      actions                      savingsa                          savingsb 
    Realign and                                                               
      close to    Tech-5                   $107.1      $49.4       2   $572.7
     co-locate                                                       
     extramural           ($153.5)                                   
      research                                                       
      program                                                        
    managers (at                                                     
    the National                                                     
Naval Medical                                                     
      Center,                                                        
     Bethesda)c                                                      

     Realign to consolidate maritime C4ISR   Tech-9 (106.1) 88.6 38.7 1 455.1 
RDAT&E (at Naval Amphibious Base, Little                             
     Creek; Naval Surface Warfare Center,                               
                   Dahlgren                                             
    Division; Naval Station Newport; Naval                              
Submarine Base Point Loma; Naval Weapons                             
     Station Charleston; and Naval Station                              
                   Norfolk)                                             

Realign to create a naval integrated  Tech-15 (358.1) (148.7) 59.7 7 433.4 
                  weapons                                               
and armaments RDAT&E center (at Naval                                
                    Air                                                 
     Weapons Station China Lake, Naval                                  
                  Surface                                               
Warfare Center Indian Head, and Naval                                
     Surface Warfare Center Dahlgren)                                   

      Realign and close to consolidate    Tech-22 (164.6) (45.0) 41.1 4 357.3 
                  defense                                               
research service-led laboratories (at                                
                  Wright-                                               
Patterson Air Force Base, Kirtland Air                               
                   Force                                                
     Base, Hanscom Air Force Base, and                                  
                  Aberdeen                                              
              Proving Ground)                                           

Realign to consolidate air and space  Tech-6  (254.4) (115.3) 36.2 8 238.0 
                   C4ISR                                                
RDAT&E (at Hanscom Air Force Base and                                
          Edwards Air Force Base)                                       
Realign to consolidate Navy strategic Tech-12                 13.4 7  61.4 
                  T&E (at                        (86.4)   (76.7)        
Strategic Weapons Facility Atlantic,                                 
                Kings Bay)                                              

                                  Appendix XII
                      Technical Joint Cross-Service Group
                     Selection Process and Recommendations

(Continued From Previous Page)

                 Fiscal year 2005 constant dollars in millions

Net

annual recurring (costs) or

savings

Payback period (years)

                                20-year net present value (costs) or savingsb

DOD report page

One-time costs

Net implementation (costs) or savingsa

                              Recommended actions

Realign to create an integrated weapons and armaments specialty site for
guns and ammunition (at Picatinny Arsenal)

Tech-19 (116.3) (81.2) 11.3 13

Realign to establish centers for fixed wing air Tech-24 (17.7) (7.9) 2.7 9 
      platform RDAT&E (at Wright-Patterson Air                              
      Force Base and Naval Air Weapons Station                              
                     China Lake)                                            

     Realign to create an air integrated weapons   Tech-18  (2.7)   4.9 1.4 2 
      and armaments RDAT&E center (at Eglin Air                             
                     Force Base)                                            
Realign to consolidate ground vehicle D&A in a   Tech-7  (3.8) (1.9) 1.9 2 
         joint center (at Detroit Arsenal)d                                 

Realign to create a Navy sensors, electronic  Tech-28 (72.7) (50.9) 6.7 12 
    warfare, and electronics RDAT&E center (at                             
    Naval Air Warfare Center, Weapons Division,                            
                    China Lake)                                            

Realign to consolidate sea vehicle D&A (at  Tech-13  (1.5)  (0.1)  0.2  7  
Naval Surface Warfare Center Carderock and                              
      Naval Sea Systems Command, Washington                                
                   Navy Yard)                                              

      Realign to establish     Tech-26   (49.4)     (40.2)  2.8   26   (11.8) 
centers for rotary wing air                                       
platform DAT&E (at Patuxent                                       
            River and                                                
        Redstone Arsenal)                                            
              Total                    ($1,387.2) ($367.4) $265.5    $2,210.5 

Source: GAO analysis of DOD data.

Notes: R denotes the research functions, D&A denotes the development and
acquisition functions, and T&E denotes the test and evaluation functions.
C4ISR denotes command, control, communications, and computers,
intelligence, surveillance, and reconnaissance.

aThis represents net costs or savings within the 6-year implementation
period required to implement BRAC recommendations.

bDOD used a 2.8 percent discount rate to calculate net present value.

c We identified an additional $12.8 million that was included as a
one-time savings but should have been an annual recurring savings for the
recommendation to co-locate extramural research program managers. If this
amount were included, the annual recurring savings increases to $62.2
million and the 20-year net present value increases to a savings of $698.6
million.

d We identified errors, including antiterrorism force protection savings
listed as a recurring, rather than a one-time, savings, that overstated
the annual recurring savings for the recommendation to consolidate ground
vehicle development and acquisition in a joint center. When these errors
are corrected, there is an annual recurring cost of $59,000, a 20-year net
present value a cost of $4.3 million, and the recommendation never pays
back.

                                  Appendix XII
                      Technical Joint Cross-Service Group
                     Selection Process and Recommendations

The majority of the projected net annual recurring savings are based on
eliminating civilian and contractor personnel ($167.7 million) as
functions are realigned between installations and vacating leased space
($51.8 million). On the other hand, the majority of the projected costs
are for constructing new facilities ($644.6 million) and moving personnel
and equipment ($326.7 million) to the gaining installations. The group's
13 recommendations include 6 closures, 62 realignments, and 1
disestablishment for a total of 69 actions. For example, the group's
recommendation to consolidate maritime C4ISR research, development and
acquisition, and test and evaluation includes 16 realignment actions and 1
disestablishment action.

The technical group's recommendations support, to a limited extent, the
goals of maximizing jointness and furthering transformation efforts within
the department. Eight of the group's 13 recommendations move functions
from one service or defense agency's installation to another service's
installation. For example, the recommendation to create an integrated
weapons and armaments specialty site for guns and ammunition moves seven
Navy functions to an Army installation. While the chairman of the group's
Capabilities Integration Team told us that all of the group's
recommendations were transformational, the supporting information often
suggested the recommendations were more focused on combining like work at
a single location without a clear indication of how it provided for
transformation. Two of the group's recommendations specifically mention
transformation in their justification statements, but the transformational
effects are not clear in the documentation. For example, the
recommendation to create an air integrated weapons and armaments research,
development and acquisition, and test and evaluation center states that it
supports transformation because it moves and consolidates smaller weapons
and armaments efforts into high military value integrated centers and
leverages synergy among the three functions; however, the documentation
does not discuss how these actions are transformational.

Issues Identified with Time did not permit us to assess the operational
impact of each of the

technical group's recommendations, particularly where operationsApproved
proposed for consolidation extend across multiple locations outside of a
Recommendations single geographic area. At the same time, we offer a
number of broad-based

observations about the proposed recommendations.

While available data supporting the recommendations suggest their
implementation should provide for more efficient operations within DOD,

                                  Appendix XII
                      Technical Joint Cross-Service Group
                     Selection Process and Recommendations

there are some issues that the BRAC Commission may wish to consider during
its review process. Specifically, the Commission may want to consider
whether the level of personnel reductions is attainable, issues related to
projected savings from vacating leased space, the long payback period and
relatively small savings for some recommendations, and the economic impact
of one recommendation.

Personnel Reductions	The technical group developed a standard assumption
to eliminate 15 percent of military and civilian personnel affected by the
recommendation for consolidation and joint actions based on personnel
eliminations at technical facilities in previous BRAC rounds.8 The group
used a different assumption (5.5 percent reduction in affected military
and civilian personnel) for co-location actions because it is believed
that there are likely to be fewer efficiency gains for co-locations than
consolidations or joint actions. A technical group official told us that
in some cases the group used higher personnel reduction estimates than the
standard because the military department provided for higher estimated
personnel reductions in the certified data, and the military services
agreed with all personnel eliminations in the group's recommendations. We
believe there is some uncertainty regarding the magnitude of the group's
expected savings for these personnel reductions because its estimates are
based on assumptions that have undergone limited testing and full savings
realization depends upon the attainment of these personnel reductions.
Eight of the group's 13 recommendations eliminate at least 15 percent of
military and civilian personnel positions affected by the recommendation.
Personnel savings account for at least 40 percent, and as much as 100
percent, of the group's projected annual recurring savings for each of
these 8 recommendations. Almost three-quarters of all personnel savings
come from civilian personnel eliminations.

8 The group found that the Navy's 1995 BRAC recommendations projected that
the Navy would eliminate 4,000 technical positions. Comparable information
was not available for the Air Force and Army; however, the group assumed
that the Air Force and Army eliminated the same number of personnel, for
an approximate 12 percent reduction of the technical workforce through
BRAC 1995. The group rounded this up to 15 percent for a standard
assumption for military and civilian personnel reductions. Based on our
analysis of the 1995 BRAC recommendations, it is unlikely that the Air
Force and Army reduced their technical workforces by 4,000 positions
because neither had BRAC recommendations that closed significant technical
facilities.

Appendix XII
Technical Joint Cross-Service Group
Selection Process and Recommendations

Similar to military and civilian personnel, the technical group developed
a standard assumption that the subgroups could eliminate 15 percent of
contractor personnel and could take $200,000 in recurring savings for each
contractor position eliminated. It is unclear from the data what
percentage of contractor positions were eliminated because the total
number of contractor personnel is not included in the COBRA data. Seven of
the group's recommendations include savings from eliminating contractor
personnel, for a total of $53.9 million in net annual recurring savings.9
In contrast, the data on economic impact (criterion 6 of the BRAC
selection criteria) show a net loss of 508 contractor personnel in 10
recommendations, which would have totaled $101.6 million in net annual
recurring savings. Technical group officials told us that both sets of
numbers are based on certified data from the services; however, they added
that the contractor data were difficult to collect because they were
provided by the services through the scenario data calls, rather than as
standard data in the COBRA model.

It is unclear to what extent the personnel reductions assumed in the
group's recommendations will be attained, largely because of uncertainties
associated with the group's assumptions. For example, the group's
recommendation to create a naval integrated weapons and armaments
research, development and acquisition, and test and evaluation center
includes the reduction of 15 percent of military and civilian personnel.
As mentioned above, the technical group assumed a standard 15 percent
reduction in military and civilian personnel for consolidation and joint
actions and a 5.5 percent reduction in military and civilian personnel for
colocation actions. Because we are uncertain whether the 15 percent
reduction in military and civilian personnel for consolidations and joint
actions is attainable, we determined the costs and savings of the
recommendation with the 5.5 percent personnel reduction for co-locations.
Table 42 shows the financial aspects of DOD's original recommendation with
a 15 percent reduction in military and civilian personnel, our analysis of
the recommendation with a 5.5 percent reduction in military and civilian
personnel, and the difference between the two recommendations.

9 We identified an additional $12.8 million savings for eliminating
contractors for the recommendation to co-locate extramural research
program managers that was included as a one-time savings but should have
been an annual recurring savings. The total annual recurring savings for
eliminating contractors would increase to $66.7 million if this error is
corrected.

                                  Appendix XII
                      Technical Joint Cross-Service Group
                     Selection Process and Recommendations

Table 42: Comparison of Alternatives to Personnel Reductions for the
Recommendation to Create a Naval Integrated Weapons and Armaments
Research, Development and Acquisition, and Test and Evaluation Center

                 Fiscal year 2005 constant dollars in millions

                                                                  20-year net
                                      Net annual Payback period present value
                      Recommendation recurring savings (years) savings (cost)

                      DOD's recommendation $59.7 7 $433.4

GAO's analysis (5.5 42.0 10 201.8 percent military andcivilian personnel
reduction)

                          Difference $17.7 (3) $231.6

                       Source: GAO analysis of DOD data.

Leased Space	Our analysis identified some inconsistencies in projecting
annual recurring savings and one-time savings in three recommendations10
to move activities from leased space.11 The technical group used two
different methodologies to project annual recurring savings from vacating
leased space. In one recommendation, the group projected annual recurring
savings based on future leased costs12 while in the other two, the group
used actual lease costs data provided by the military services and defense
agencies. Furthermore, the recommendation to co-locate the extramural
research program managers also includes $2.7 million in annual recurring
savings for the Defense Threat Reduction Agency vacating leased space;
however, the agency is already scheduled to move to Fort Belvoir,
Virginia, in January 2006.

10 The recommendations are the co-location of extramural research program
managers, consolidation of ground vehicle development and acquisition, and
co-location of the Defense research service-led laboratories.

11 The eight locations are the Air Force Research Laboratory, Mesa City,
Arizona; United States Marine Corps Direct Reporting Program Manager
Advanced Amphibious Assault facilities, Virginia; Office of Naval
Research, Virginia; Air Force Office of Scientific Research facility,
Virginia; Army Research Office, North Carolina; Army Research Office,
Virginia; Defense Advanced Research Project Agency facility, Virginia; and
Defense Threat Reduction Agency, Fort Belvoir, Virginia, which is
currently in leased space in Virginia.

12 The projected savings were determined using the Headquarters and
Support Activities Joint Cross-Service Group's methodology of a savings of
$37.29 per square foot of space being vacated within the Washington, D.C.
area. The group assumed that 160 square feet would be vacated for each
person moved or eliminated.

                                  Appendix XII
                      Technical Joint Cross-Service Group
                     Selection Process and Recommendations

The technical group also included $14.5 million in one-time savings for
seven of the eight activities13 vacating leased space for the cost of
upgrading existing leased space to meet DOD's antiterrorism and force
protection standards.14 The group did not collect data that would indicate
whether existing leases met the antiterrorism and force protection
standards. Our analysis indicates that excluding these one-time savings
would have minimal impact on the overall projected savings of the
technical group's recommendations.

                  Limited Savings during Implementation Period

Only 3 of the 13 recommendations achieve savings during the 6-year
implementation period, and 3 of the group's recommendations take longer
than 10 years to achieve savings, far longer than typically occurred in
the 1995 BRAC round. According to a technical group official, the
recommendation to establish a center for rotary wing air platform
research, development and acquisition, and test and evaluation, which has
a 26-year payback, was retained because it realigns the technical-related
work away from a test range at Fort Rucker, Alabama, which will provide
for expanded training space. An Army official agreed that a potential
benefit of realigning the test range at Fort Rucker is that it would make
available hangars, facilities, and airspace for trainers. For example, the
Army said that the vacated hangar space could potentially be used to
accommodate the Aviation Logistic School's proposed move to Fort Rucker
and the reduced demand for airspace will make additional airspace
available to meet the current and future needs for manned and unmanned
aviation training.

The group's recommendation to create an integrated weapons and armaments
specialty site for guns and ammunition, which has one-time costs of $116.3
million and a 20-year net present value savings of $32.6 million, has a
payback of 13 years. Technical group officials told us that this
recommendation was determined to be worth the costs and longer payback
period because it provides synergy and jointness, as well as eliminating
some duplication, in research and development and acquisition of guns and
ammunition for the Army and Navy.

13 The technical group did not take a one-time savings for the Defense
Threat Reduction Agency because, according to an agency official, the
agency is scheduled to move to Fort Belvoir in January 2006.

14 See app. VII for further discussion of antiterrorism and force
protection standards.

                                  Appendix XII
                      Technical Joint Cross-Service Group
                     Selection Process and Recommendations

According to a group official, the group's recommendation regarding Navy
sensors, electronic warfare, and electronics research, development and
acquisition, and test and evaluation, which has a 12-year payback period,
is beneficial because it consolidates similar work currently performed at
locations that are in proximity to each other and clears out laboratory
space at Naval Air Station Point Mugu, California, that is needed for
personnel moving in from Naval Support Activity Corona, California,
through a Navy recommendation. The official added that while the payback
for this recommendation is long, it should be put into perspective with
the savings from closing Naval Support Activity Corona because the savings
from closing that facility (net annual recurring savings of $6.0 million
and a 20-year net present value of $0.4 million) would be smaller had the
laboratory space not been available at Point Mugu.15

Economic Impact	One of DOD's BRAC selection criteria, criterion 6,
required the department to consider the economic impact on existing
communities in the vicinity of military installations when determining
realignments and closures. In most cases, the group's recommendations had
a cumulative impact on communities of less than 1 percent as measured by
direct and indirect job loss as a percentage of employment for the
economic area of the military installation. However, the exception is the
recommendations that realign activities from Naval Surface Warfare Center
Crane, Indiana, which would result in an economic impact of 9.3 percent. A
technical group official stated that realigning the technical
infrastructure to respond to defense needs over the next 20 years took
priority over the economic impact of the proposed recommendation. Two of
the group's recommendations realign or eliminate approximately 460
military and civilian personnel and 80 contractor personnel from Naval
Surface Warfare Center Crane, for a cumulative reduction of 9.3 percent of
employment in Martin County, Indiana, when direct and indirect jobs are
considered.16

15 As previously mentioned, the technical group originally provided other
options for the Navy's recommendation to close Naval Support Activity
Corona, which were disapproved by the ISG.

16 When the impact of other joint cross-service group and service
recommendations is included, this increases to 683 direct jobs lost and an
11.6 percent reduction in direct and indirect jobs in Martin County.

                                  Appendix XII
                      Technical Joint Cross-Service Group
                     Selection Process and Recommendations

Personnel Realignments from Point Mugu

There is some uncertainty on the number of civilian personnel that would
be realigned in the technical group's recommendation to create a naval
integrated weapons and armaments research, development and acquisition,
and test and evaluation center. The recommendation proposes to realign
about 1,400 civilian employees from Naval Air Station Point Mugu,
California, to Naval Air Weapons Station China Lake, California. However,
in its data call submission, Naval Air Station Point Mugu identified 505
civilian employees that operate or support an outdoor range that it
believes should remain at Point Mugu; however the technical group's
recommendation proposes to move these personnel to China Lake.17 A Navy
official said that if the recommendation is approved the Navy will decide
the best way to manage the range, including the appropriate number of
employees to retain at Point Mugu, during implementation. Our analysis
indicates that if the 505 civilian employees remain at Point Mugu, the
20year net present value savings decreases by about $87.4 million but the
payback period remains at 7 years.

Scenario Eliminated from Consideration

The technical group developed a scenario that would have allowed the Air
Force to close Los Angeles Air Force Base, California, which may have
further contributed to the accomplishment of BRAC objectives; however, the
Air Force Base Closure Executive Group did not approve this scenario due
to the base's relatively high military value and perceived operational
risk due to a potential for schedule and performance disruption. Table 43
provides a summary of the financial aspects of this scenario.

17 A Navy official said that most Navy activities asked to exclude large
numbers of personnel from consideration in recommendations and the
technical group was consistent in disregarding these exclusions.

                                  Appendix XII
                      Technical Joint Cross-Service Group
                     Selection Process and Recommendations

 Table 43: Estimated Costs and Savings for the Rejected Closure of Los Angeles
                                 Air Force Base

                 Fiscal year 2005 constant dollars in millions

                                                                  20-year net 
                                            Net annual                present 
                                                                        value 
            One-time                     recurring     Payback                
                     Net implementation  (costs)       period      (costs) or
Scenario    costs (costs) or savingsa    or savings    (years)    savingsb 

       Close Los Angeles Air Force      ($305.1)  ($161.1)  $52.9  6   $358.5 
      Base and do not provide work                                    
    space for contractors at Peterson                                 
             Air Force Base                                           

Source: DOD.

aThis represents net costs or savings within the 6-year implementation
period required to implement BRAC recommendations.

bDOD used a 2.8 percent discount rate to calculate net present value.

The technical group developed a scenario to realign space development and
acquisition from Los Angeles Air Force Base, California, to Peterson Air
Force Base, Colorado, among other actions, which would allow the Air Force
to close the base. However, the group deleted the scenario based on
military judgment before it finished its analysis. While the group's
meeting minutes do not provide the specific reason that the scenario was
deleted, the minutes say moving the Space and Missile Center from Los
Angeles Air Force Base to Peterson Air Force Base would involve the
movement of the federally funded research and development center,18 there
was no compelling reason to move the Space and Missile Center to Peterson
Air Force Base, and the Air Force did not support the scenario. Toward the
end of the process the ISG requested that the technical group finish its
analysis. The group completed its analysis and presented the information
to the Air Force Base Closure Executive Group.19 The Air Force Base
Closure Executive Group decided not to close Los Angeles Air Force Base
because (1) Los Angeles Air Force Base has the highest military value in
space

18 Federally funded research and development centers are nonprofit
entities sponsored and funded by the government that typically assist
government agencies with scientific research and analysis, systems
development, and systems acquisition. The Aerospace Corporation is the
federally funded research and development center that works with the Space
and Missile Systems Center at Los Angeles Air Force Base.

19 The Air Force considered three options for closing Los Angeles Air
Force Base. One option used a city-base construct, which had a 2-year
payback and a $99.0 million 20-year net present value savings. Another
allowed for office space for the contractors with the federally funded
research and development center and had a 9-year payback and a $228.3
million 20-year net present value savings.

Appendix XII
Technical Joint Cross-Service Group
Selection Process and Recommendations

development and acquisition-its military value in space development and
acquisition is four times higher than that of Peterson-and (2) the closure
has a near-term operational risk due to a potential for schedule and
performance disruption to development and acquisition programs and
activities, intellectual capital, and synergy with industry based in Los
Angeles and surrounding areas.

Technical group officials told us that there are several reasons to close
Los Angeles Air Force Base in addition to the net recurring savings ($52.9
million) and relatively high 20-year net present value savings ($358.5
million). Los Angeles Air Force Base is a single-service installation that
primarily performs one function in one technical capability area-
development and acquisition of space platforms. The technical group sought
to identify opportunities to consolidate smaller single-function locations
to larger multifunction facilities, so closing Los Angeles Air Force Base
would meet this goal. The group proposed to move the functions at Los
Angeles Air Force Base to Peterson Air Force Base to co-locate the
development and acquisition function with the operational user. Other
alternatives could achieve other goals. For example, moving the space
development and acquisition function from Los Angeles Air Force Base to
Kirtland Air Force Base, New Mexico, which performs research on space
platforms, could expedite the transition of technology from the research
phase to development and acquisition. Alternatively, there could be
increased jointness among the services if the functions at Los Angeles Air
Force Base were moved to Redstone Arsenal, Alabama, where much of the
Army's space platform development and acquisition work is done.

Appendix XIII

                     Cost of Base Realignment Actions Model

DOD used a quantitative model, known as the Cost of Base Realignment
Actions (COBRA) model, to provide consistency across the military services
and the joint cross-service groups in estimating the costs and savings
associated with BRAC recommendations. DOD has used the COBRA model in all
previous BRAC rounds and over time has made improvements designed to
provide better estimating capability. Similarly, DOD has continued to
improve the model for its use in the 2005 BRAC round. We have examined
COBRA in the past and during this review and have found it to be a
generally reasonable estimator for comparing potential costs and savings
among candidate alternatives. As with any model, the quality of the output
is a direct function of the input data. Also, as in previous rounds, the
COBRA model, which relies to a large extent on standard factors and
averages, does not represent budget quality estimates that will be
developed once BRAC decisions are made and detailed implementation plans
are developed. The COBRA model also does not include estimated costs of
environmental restoration as DOD considers these costs a liability that
must be addressed whether or not an installation is closed.

COBRA Used as Tool to Estimate Costs and Savings Associated with BRAC
Recommendations

DOD used the COBRA model to address the BRAC 2005 selection criterion
related to costs and savings associated with the various proposed BRAC
recommendations.1 It was designed to model the estimated costs and savings
associated with actions that are necessary to implement BRAC
recommendations over the 6-year implementation period set by the BRAC
statute,2 and recurring costs or savings thereafter.3 COBRA provides for
several key outputs that may influence the decision-making process,
including (1) estimated costs for such factors as personnel severance,
moving costs, or military construction over the implementation period; (2)
estimated savings for personnel reductions or eliminations, or reduced
operations and maintenance costs over that same period; (3) the "payback"
time required for estimated cumulative savings to outweigh cumulative

1 P.L. 101-510, section 2913 (c)(1) requires DOD to consider the extent
and timing of potential costs and savings, including the number of years
until savings exceed costs, in its BRAC selection process.

2 BRAC legislation provides for a 6-year implementation period following
the approval of recommended BRAC actions. Thus the final year for
implementation of a closure or realignment action for the 2005 BRAC round
is 2011. P.L. 101-510, section 2904 (a)(5).

3 For BRAC 2005, costs and savings are in fiscal year 2005 constant
dollars.

              Appendix XIII Cost of Base Realignment Actions Model

costs for the actions; (4) annual recurring savings; and (5) the net
present value of BRAC actions, calculated over a 20-year time frame.4
Collectively, this financial information provides important input into the
selection process as decision makers weigh the financial implications for
various BRAC actions along with military value and other factors (for
example, military judgment) in arriving at final decisions regarding the
suitability of BRAC recommendations.

The COBRA model uses a set of formulas, or algorithms, that rely on
standardized data as well as base- and scenario-dependent data to perform
its calculations. Standard factors are common to a class of bases and are
applicable for all recommendations that involve those bases. Some standard
factors apply only to one DOD component or a subset of a component's
bases, while others are applicable to all bases DOD-wide. Typical standard
factors include, for example, average personnel salaries and costs per
mile and per ton for moving personnel and equipment. Baseand
recommendation-specific data, which were to be certified in accordance
with the BRAC statute, include, for example, the number of authorized
personnel on a base, the size of the base, and annual sustainment costs.
As with any model, the quality of the output is a direct function of the
quality of the input data. For this reason, the data used in COBRA were to
be certified, in a manner similar to that employed for the capacity and
military value data, as to their accuracy.

COBRA Improvements over Time

The COBRA model has been used in the base closure process since 1988, and
in the intervening years it has been consistently revised to address the
problems we and others have identified after each round. DOD has once
again made improvements to the model, as shown in table 44, that are
designed to further refine its estimating capability.

4 In the context of BRAC, net present value is taking into account the
time value of money in calculating the value of future cost and savings.
For fiscal year 2005, DOD used a 2.8 percent discount rate to calculate
net present value.

              Appendix XIII Cost of Base Realignment Actions Model

Table 44: Major Improvements to COBRA for the BRAC 2005 Round

BRAC 1995 shortcomings BRAC 2005 improvements

Inconsistencies across services in developing BRAC-related facility
Consistency for construction cost estimates established through

construction cost estimates	use of DOD-wide standards for facility
categories and costs per square foota

Facility maintenance cost estimates often overstated because actual
maintenance was typically underfunded

Facility maintenance (sustainment) cost estimates adjusted to reflect
historical service-specific funding of maintenance accounts Facility
rehabilitation cost estimates did not specify existing facility condition
Facility condition included as a factor in developing rehabilitation cost
estimates

  Facility recapitalization costs and cost avoidances limited to the Facility
           recapitalization costs and cost avoidances considered over

short term the longer term using average service-specific base
recapitalization costs Estimated costs for operating and maintaining
retained reserve Provisions to consider reserve enclave-related estimated
costs enclaves on closing bases were not identified were included

Average civilian personnel pay cost estimates excluded locality pay
Locality pay was included in median civilian pay costs differentials

Civilian housing-related relocation cost estimates were based on
Housing-related relocation cost estimates were targeted to local adjusted
national median housing costs housing costs associated with base-specific
actions

Algorithms for base operating support costs were not properly Algorithms
were revised, based on service-specific factors for base supported
operating support

Limited consideration was given to overall medical costs for the
government upon closure of military treatment facilities

Increased consideration was given to medical-related costs through use of
base-specific data related to medical beneficiary costs

No specific consideration was given to storage-in-transit costs or
information technology costs for personnel-related moves

Standard factors were developed for storage and information technology
costs

Source: GAO analysis of DOD data.

aSquare footage requirements were service specific for areas such as
administrative office space.

The improvements were made by a COBRA Joint Process Action Team that was
established early in the 2005 BRAC round process. The Joint Process Action
Team, consisting of officials from the Office of the Secretary of Defense,
the military services, and representatives from the joint crossservice
groups, met frequently over several months in late 2003 to improve the
model. We also attended most of these meetings as observers in an
oversight role, and we shared our observations and raised issues of
concern as appropriate. The Joint Process Action Team, on many occasions,
addressed our concerns by making appropriate changes to the model. For
example, we reported in June 2003 that COBRA did not include estimated
costs for operating and maintaining the reserve component

              Appendix XIII Cost of Base Realignment Actions Model

enclaves created during the prior BRAC rounds,5 thereby having the effect
of overstating the savings for those particular BRAC actions.
Consequently, the Joint Process Action Team provided for the inclusion of
these costs in the COBRA model. In another case, the Joint Process Action
Team developed an approach to incorporate longer term estimated facility
recapitalization costs in COBRA, thus overcoming a COBRA shortcoming that
we identified in our 1997 report on lessons learned from the prior BRAC
rounds.6

As was done in the 1995 BRAC round, the Army Audit Agency examined the
improved COBRA model to determine whether the model accurately calculated
cost and savings estimates as described in the user's manual. The Army
Audit Agency assumed this responsibility at the request of The Army Basing
Study Group since the Army serves as the executive agent for the COBRA
model. The Army Audit Agency tested all 340 algorithms in the model as
presented in the user's manual and reported in September 2004 that COBRA
accurately calculated costs and savings as prescribed in the manual.7
Following the audit, however, multiple revisions were made to the model to
include changes to the TRICARE and privatization algorithms because of
programming errors in the model. The Army Audit Agency subsequently
reexamined the revisions where these algorithms were modified and
concluded in a similar fashion that the model accurately calculated the
estimates. In addition, the Army Audit Agency validated the certified data
and documentation supporting the standard factors used in the model.

Application of COBRA in the 2005 BRAC Round

Although the COBRA model serves as a common tool with many standardized
features across DOD for analyzing costs and savings for alternative
recommendations, its actual application and results depend heavily on the
DOD guidance on what constitutes costs or savings,

5 GAO, Military Base Closures: Better Planning Needed for Future Reserve
Enclaves, GAO03-723 (Washington, D.C.: June 27, 2003). An enclave is a
section of a military installation that remains intact after the
installation is closed or realigned, and that will continue with its
current role and functions, subject to specific modifications.

6 GAO, Military Bases: Lessons Learned from Prior Base Closure Rounds,
GAO/NSIAD-97151 (Washington, D.C.: July 25, 1997).

7 U.S. Army Audit Agency, Cost of Base Realignment Actions (COBRA) Model,
Audit Report A-2004-0544-IMT (Alexandria, Va.: Sept. 30, 2004).

Appendix XIII Cost of Base Realignment Actions Model

accuracy of the input data, and the flexibility provided to users of the
model to consider additional input data that can affect cost and savings
estimates. The following are examples of cases where the specific
application of the model can have an effect on the estimates:

o 	The COBRA model generates a dollar amount attributable to the reduction
or elimination of military personnel at realigning or closing bases. While
it has been DOD's practice to classify these reductions or eliminations as
recurring savings, we have consistently taken the view that these actions
should not be counted as savings that can be used outside the military
services' personnel accounts unless commensurate reductions are made in
the affected military services' end strengths. We acknowledge that these
actions may afford DOD the opportunity to redirect these personnel to
serve in other roles that would benefit DOD. Our analysis of DOD data
indicate that about 47 percent-about $2.6 billion-of the expected net
annual recurring savings of nearly $5.5 billion for the 2005 round are
attributable to these military personnel actions, for which reductions in
the military personnel endstrength levels are not planned.

o 	The COBRA model provides users with considerable flexibility in
estimating one-time and miscellaneous recurring costs or savings of
various recommendations by allowing them to consider what actions might
constitute a cost or savings and what the expected dollar amounts should
be. Validating the level of projected savings is less clear-cut for
recommendations that, instead of closing facilities, realign workloads
from one location to another, or that estimate savings in overhead or
other consolidation efficiencies. The dollar amounts could be based on
specific assumptions as well as certified data but nonetheless be subject
to greater degrees of uncertainty pending implementation than would be
actions resulting in facility closures where expected reductions are more
clear-cut. Our analysis of the BRAC recommendations showed inconsistencies
across some of the services and joint cross-service groups in applying
COBRA in this area.

o 	The COBRA model uses authorized base personnel levels in its
calculations to estimate costs and savings arising from DOD's
recommendations. DOD decided to use authorized rather than actual
personnel levels because of difficulties in collecting data on actual
levels. This decision could create more imprecision in the estimates; for
example, in cases where the actual personnel levels are higher or lower
than those authorized for bases that are closing, the savings estimates

              Appendix XIII Cost of Base Realignment Actions Model

would be either understated or overstated. Time did not permit us to
determine the extent to which this might be the case in the proposed
recommendations.

Comparability of COBRA Estimates and Actual Costs and Savings

Although COBRA has provided DOD with a standard quantitative approach
enabling it to compare the estimated costs and savings associated with
various proposed BRAC recommendations, it should be noted that it does not
necessarily reflect with a high degree of precision the actual costs or
savings that are ultimately associated with the implementation of a
particular BRAC action. COBRA is not intended to produce budget-quality
data and is not used to develop the budgets for implementing BRAC actions,
which are formulated following the BRAC decision-making process. COBRA
estimates may vary from the actual costs and savings of BRAC actions for a
variety of reasons, including the following:

o 	COBRA estimates, particularly those based on standard cost factors, are
imprecise and are later refined during implementation planning for budget
purposes. The use of averages has an effect on precision. For example, as
noted previously, COBRA uses authorized, rather than actual, base civilian
personnel figures in its calculations. Our work has shown that the actual
number of personnel may be lower or higher than that which is authorized.
The authorized personnel levels are documented estimates, which can be
readily audited. COBRA also uses a median national civilian personnel
salary figure (adjusted by locality pay), rather than average pay at a
particular base, in its calculations. Further, COBRA estimates are
expressed in constant-year dollars, whereas budgets are expressed in
then-year dollars.

o 	Some costs are not fully captured in COBRA. For example, COBRA
estimates do not include the cost of environmental restoration for
BRAC-affected bases, in keeping with DOD's long-standing policy of not
considering such costs in its BRAC decision making.8 We reported in
January 2005 that these costs can be substantial,9 accounting for about

8 This policy is based on the fact DOD is obligated to restore
contaminated sites on military bases regardless of whether they are
closed. We agree with DOD's position that such costs are a liability to
DOD regardless of its base closure recommendations. While such costs are
not included in COBRA, they are included in developing BRAC implementation
budgets.

9 GAO, Military Base Closures: Updated Status of Prior Base Realignments
and Closures, GAO-05-138 (Washington, D.C.: Jan. 13, 2005).

Appendix XIII Cost of Base Realignment Actions Model

36 percent, or $8.3 million, of the $23.3 million in costs incurred
through fiscal year 2003 for implementing BRAC actions for the previous
four BRAC rounds. Further, COBRA does not include estimates for some other
costs to the federal government, particularly those related to other
federal agencies or DOD providing assistance to BRAC-affected communities.
That is because assistance costs depend on specific implementation plans
that are unknown at the time COBRA estimates are developed. In our January
2005 report on the previous BRAC rounds, we noted that about $1.9 billion
in such costs had been incurred through fiscal year 2004.

o 	Some savings are not fully captured in COBRA as well. COBRA does not
include estimates, for example, for anticipated sales of BRAC surplus
property or other revenue that may be collected in the future through
property leasing arrangements with BRAC-affected entities. These revenues
can help offset some of the costs incurred in implementing BRAC actions.
While such estimates had been included in COBRA in the previous rounds,
the Joint Process Action Team decided not to include any such estimates
for the 2005 round because of the difficulty in estimating the amount of
these revenues.

Nonetheless, while COBRA estimates do not necessarily reflect the actual
costs and savings ultimately attributable to BRAC, we have recognized in
the past and continue to believe that COBRA is a reasonably effective tool
for the purpose for which it was designed: to aid in BRAC decision making.
It provides a means for comparing cost and savings estimates across
alternative closure and realignment recommendations.

Appendix XIV

Economic Impact Assessments

One of the eight selection criteria used to make BRAC decisions was the
economic impact on existing communities in the vicinity of military
installations coming from BRAC recommendations. DOD measured the economic
impact of BRAC recommendations on the affected community's economy in
terms of total potential job change-measured both in absolute terms
(estimated total job changes) and relative terms (total job changes as a
percentage of the economic area's total employment). This approach to
measuring economic impact is essentially the same approach DOD used in the
1995 BRAC round. In a series of reports, that examine the progress in
implementing closures and realignments in prior BRAC rounds,1 we examined
how the communities surrounding closed bases were faring in relation to
key national indicators. In our last status report,2 we observed that most
communities surrounding closed bases were faring well economically in
relation to key national economic indicators. While some communities
surrounding closed bases were faring better than others, most have
recovered or are continuing to recover from the impact of BRAC, with more
mixed results recently, allowing for some negative impact from the 2001
recession.

While there will be other economic impacts from 2005 BRAC actions that DOD
did not consider, such as changes in the value of real estate or changes
in the value of businesses in the economic area, we believe that the
magnitude of job changes would be correlated with the changes in these
other dimensions of economic impact. Although not a precise predictor of
the economic impact, we and an independent panel of experts assembled by
DOD agree that the methodology used by DOD makes a reasonable attempt to
measure economic impact of BRAC actions, both in terms of communities
losing and gaining jobs as a result of BRAC actions.3

1 GAO, Military Base Closures: Updated Status of Prior Base Realignments
and Closures, GAO-05-138 (Washington, D.C.: Jan. 13, 2005); GAO, Military
Base Closures: Progress in Completing Actions from Prior Realignments and
Closures, GAO-02-433 (Washington, D.C.: Apr. 5, 2002); and GAO, Military
Bases: Status of Prior Base Realignment and Closures Rounds,
GAO/NSAID-99-36 (Washington, D.C.: Dec. 11, 1998).

2 GAO, Military Base Closures: Updated Status of Prior Base Realignments
and Closures, GAO-05-138 (Washington, D.C.: Jan. 13, 2005).

3 An independent review panel of four members, three Ph.D. economists and
one policy analyst, who were all experienced in conducting local economic
impact studies and who were not otherwise associated with the BRAC 2005
process was formed to review the methodology and to determine if it
conformed to accepted economic practices.

                    Appendix XIV Economic Impact Assessments

Economic Impact Methodology

DOD assessed the economic impact of realignments and closures using a
methodology that sought to estimate the total direct and indirect job
changes. To perform its assessment, DOD established the Economic Impact
Joint Process Action Team with members of the services and the Office of
the Secretary of Defense (OSD) to develop an economic impact model for the
services and joint cross-service groups to use as they considered
potential recommendations. The team met many times to develop the economic
methodology. We attended and observed those meetings as the methodology
was developed. DOD also retained a private firm, Booz Allen Hamilton, to
provide technical assistance in developing the methodology and computer
database used by the military services and joint cross-service groups in
calculating economic impacts in communities for which they were
considering closure or realignment actions.

Using a list of candidate bases provided by the representatives from each
service and OSD, the primary counties in which the bases were located were
derived and the regions of economic influence (economic areas) for those
bases were determined from those counties.4 The economic area for each
base was defined as the Metropolitan Statistical Area (MSA) or
Micropolitan Statistical Area in which the base's primary county or
counties lie.5 For bases in MSAs that are divided into Metropolitan
Divisions, the economic area is defined as the Metropolitan Division in

4 Based on the primary counties in which bases were located, the Federal
Information Processing Standards (FIPS) codes were determined. A mapping
of the county FIPS codes to Statistical Areas as determined by OMB was
done to establish the economic area.

5 Metropolitan Statistical Area (MSA) is a core based statistical area
associated with at least one urbanized area that has a population of at
least 50,000. A core based statistical area is a statistical geographic
entity consisting of the county or counties associated with at least one
core (urbanized area or urban cluster) of at least 10,000 population, plus
adjacent counties having a high degree of social and economic integration
with the core as measured through commuting ties with the counties
containing the core. The MSA comprises the central county or counties
containing the core, plus adjacent outlaying counties having a high degree
of social and economic integration with the central country as measured
through commuting. While a MSA has at least 50,000 people, a Micropolitan
Statistical Area has at least one urban cluster that has a population of
at least 10,000 but less than 50,000. The Micropolitan Statistical Area
comprises the central county or counties containing the core, plus
adjacent outlaying counties having a high degree of social and economic
integration with the central county as measured through commuting.

Appendix XIV Economic Impact Assessments

which the base's primary county or counties lie.6 For bases in counties
not in a MSA, Micropolitan Statistical Area, or a Metropolitan Division
the economic area was defined as the county itself.

The economic impact of a potential action on an area was measured in terms
of direct and indirect job changes estimated from 2006 through 2011 as
shown below.

Estimated Total Job Changes = Direct Job Changes x (1 + indirect
multiplier + induced multiplier).

Direct job changes are the estimated net addition or loss of jobs for
military personnel, military students, civilian employees, and contractor
mission support employees.7 The indirect job changes are the estimated net
addition or loss of jobs in each economic area that could potentially
occur as a result of the direct job changes. DOD considered two types of
indirect job changes: (1) indirect job changes that are associated with
the production of goods or the provision of services that are direct
inputs to a product, such as a subcontractor producing components for a
weapon system and (2) induced job changes that are affected as a result of
local spending by direct and indirect workers, such as retail sales.

DOD used multipliers to estimate the indirect and induced job changes.
Employment multipliers for various civilian industry sectors were obtained
from the Minnesota IMPLAN Group, Inc. (MIG) for each MSA, Micropolitan
Statistical Area, Metropolitan Division, and county in which a candidate

6 A Metropolitan Division is used to refer to a county or group of
counties within a MSA that has a population core of at least 2.5 million
people.

7 Contractor mission support employees perform one or more of the military
missions on the base, and whose work tasks are virtually identical to
government civil servants or military personnel. Examples include
intelligence analysts; technicians; aircraft, ship, vehicle, or weapon
system maintenance staff; and information technology specialists.

Appendix XIV Economic Impact Assessments

base was located.8 Indirect multipliers were estimated by mapping Military
Occupational Specialties (MOSes) to economically similar civilian
sectors.9 Each of these similar economic sectors multipliers were weighted
by the number of military personnel mapped to each sector divided by the
total number of employees in the sector. Examples of these economically
similar sectors are educational services, administration and support
services, scientific research and development services, aerospace product
and parts manufacturing, and electronic repair and maintenance. Judgment
was used to place all MOSes into one of the industrial sectors. A weighted
average of the indirect multipliers, based on the weights discussed above,
for each base was used to estimate the indirect job changes from military
personnel. This weighted average of indirect multipliers used to estimate
the military indirect multiplier for each base was used to estimate the
indirect job changes from civilian personnel job changes, as well as the
indirect job changes for mission-support contractors for each base.

Estimating the induced job changes from military and civilian job changes
was more straightforward. For each economic area, MIG used one induced
multiplier for military personnel job changes and one for nonmilitary
government jobs changes. These multipliers were used to estimate the
induced job changes for each base in that economic area. Summing the
products of the weights for each of the civilian industries calculated for
the military indirect multipliers, and the induced multipliers for each of
the industries from MIG, produced the induced multiplier used for mission
support contractor job changes.

8 MIG are the developers of the IMPLAN economic impact modeling system.
The firm provides tools, data, and support to perform in-depth
examinations of state, county, or multi-county regions. Over 1,000 public
and private institutions use its tools. MIG does not have data for Puerto
Rico or Guam. Based on recommendations of the Independent Review Panel of
the BRAC economic impact methodology, MIG experts, and the Chief Economist
of the Guam Department of Labor, multipliers for Key West-Marathon Florida
Micropolitan Statistical Area (Monroe County, Florida) were assigned to
the San Juan - Caguas - Guaynabo, Puerto Rico Metropolitan Statistical
Area. Multipliers for the Honolulu, Hawaii MSA were assigned to the Guam
economic area.

9 MOSes are specific military occupations performed by military personnel.
Examples of some of the many MOSes within the military include
administrative clerk, rifleman, logistics specialist, machinist, and
ammunition technician. To aid in the crosswalk from MOSes to industry
sectors (represented by codes from the North American Industrial
Classification (NAICS)), the MOSes were mapped to the Standard
Occupational Classification, which were in turned mapped into the NAICS
codes.

Appendix XIV Economic Impact Assessments

Because of a concern about the lower spending of military trainees at
recruit training facilities, an adjustment was made to reduce the values
of the induced multipliers used for job changes of military trainees at
recruit training bases. The Economic Impact Joint Process Action Team was
also concerned about overestimating induced job changes for military
trainees at recruit training bases and thought that military trainees at
such bases have a smaller economic impact than civilian employees and
regular military personnel, including those military personnel who receive
more advanced training. The team thought this because such students
receive a relatively smaller income and are generally transient. Student
multipliers for bases with recruit training programs were estimated by
multiplying the military induced multiplier for an economic area by the
ratio of basic training wages to average military wages (slightly more
than a third). Student induced multipliers for bases without basic
training programs were set equal to the military induced multiplier for
the base's economic area. The team thought that these more advanced
students were likely to have incomes and spending habits similar to the
average military in the economic area.

Some of the joint cross-service groups subsequently considered a small
number of bases (leased spaces or Reserve/Guard centers) that were not
included in the initial set of defined economic areas. For these economic
areas, a generic set of multipliers was developed by averaging each of the
multipliers of the five categories (military, civilian, contractor,
student, and recruit training student) over the existing economic areas.10

The calculation of job change either positive or negative could be
performed in three ways:

o  by individual actions for one specific action for a base,

o  by base (net result of multiple actions for a base), and

10 Most of these new economic areas appeared to have populations smaller
than the average of the existing populations. Generally, it is expected
that the larger the population for an area, the larger the multipliers,
and vice-versa. An area with a larger population would be expected to have
more of its expenditures remaining in the area and have fewer of its
expenditures leak out to other areas. As a result, the multipliers of
areas with larger populations would be expected to be larger than average
and vice-versa. Thus, these economic areas would be expected to have
multipliers smaller than the average. Using the average multipliers would
tend to overestimate the indirect/induced job impact on these economic
areas.

Appendix XIV Economic Impact Assessments

o  by economic area (net result of all actions for the economic area).

The total potential job change and the total potential job changes as a
percentage of total in an economic area were to be considered in the
context of historical economic data. For historical context, the services
and the joint cross-service groups considered the following for each
economic area:

o  total employment: 1988 to 2002,

o  annual unemployment rates: 1990 to 2003, and

o  real per capita income: 1988 to 2002.

In addition, the latest available numbers on population would be provided.
These dates were chosen to reflect the latest available data from federal
sources.

In the 1995 BRAC round, DOD developed a separate method of assessing
cumulative economic impact because some of the closures and realignments
from the prior rounds had not been fully implemented, so special
consideration was given to the economic impacts that were yet to occur.
However in 2005, given the passage of time since all four of the previous
BRAC rounds, which extended from 1988 to 1995, and other factors
contributing to changing economic conditions in the interim period, DOD
decided not to consider the cumulative economic impact of the prior BRAC
rounds in assessing the impact of the current round. We believe DOD's
decision not to assess a cumulative economic impact for the 2005 round has
merit.

DOD had extensive documentation controls to protect how documents for
economic impact were prepared, handled, and processed. Procedures were
used to ensure that the inputs, such as the values of the multipliers,
used to make calculations on job changes were correct. A review by
qualified analysts who did not participate in the initial calculations was
also conducted.

                    Appendix XIV Economic Impact Assessments

Methodology Has Limitations but Is Reasonable for BRAC Purposes

DOD's approach to measuring economic impact did not measure all the
dimensions of the economic impact coming from a BRAC action. There will be
other economic impacts on the economic area, such as changes in the value
of real estate or the value of businesses in the area. The DOD approach
did not estimate these effects, but it is reasonable to assume that the
magnitude of job losses would be correlated with the changes in these
values.

DOD's methodology does have some limitations. Specifically, it tended to
overstate the employment impact for economic areas. One of DOD's goals for
the methodology was to produce credible estimates but to err on the side
of overstating the actual impacts in order to prevent others from arguing
that DOD was underestimating economic impact. The Joint Process Action
Team was aware that the methodology had factors that might offset the
estimated job losses. For example, the methodology assumed that that jobs
are lost all at once and does not recognize that employees may be released
over the 6-year implementation period and be reemployed in other local
businesses or outside the economic area, which would reduce the estimated
job loss. The methodology does not recognize the possible civilian reuse
of the affected base and the resulting reemployment of workers, which
would reduce the estimated job losses.

In examining the construction of the indirect multipliers, it is possible
to question how they were created. The indirect multiplier being used to
estimate job changes from military job changes for a base is constructed
as a weighted average multiplier where the weights are the fraction of
total base personnel being judged to be similar to a particular civilian
industry. Questions could be raised about judgments made to map particular
Military Occupation Specialties to activities in civilian industries. In
some cases, the mapping from military jobs to industries was easier, such
as military jobs in the medical area being mapped to the medical industry.
However, in other areas where the jobs are uniquely military, such as
infantry, the mapping would be more problematic. If a mistake was made in
mapping a job that is uniquely military to a civilian sector, the result
would depend on the relative size of the multiplier of the correct
civilian sector versus the civilian sector used. It could lead to
overestimation or underestimation of the indirect job change. Time did not
permit us to examine this mapping. Nonetheless, we believe the overall
approach seemed to be a sound attempt to produce a credible multiplier.

                    Appendix XIV Economic Impact Assessments

Finally, in using the ratio of estimated job losses from 2006 through 2011
to total employment as of 2002 (the latest figure for total employment) as
a measure of economic impact, the economic impact was likely overstated.
This occurs because total employment is likely to grow for many economic
areas over the 2006-2011 implementation period as local economies grow,
which would reduce the overall percentage of job losses.

DOD's methodology for assessing economic impact was reviewed by an
independent panel of four economists and policy analysts from the private
and academic sectors in August 2004.11 DOD formed the panel of four
members to review the methodology and to determine if it conformed to
accepted economic practices. Three of the panel members were Ph.D.
economists and the other was a policy analyst. All four were experienced
in conducting local economic impact studies and were not otherwise
associated with the BRAC process. The panel found the methodology to be
reasonable. The experts agreed that the use of direct and indirect job
changes was a logical method to characterize the impact of proposed
closures and realignments. The reviewers also concluded that DOD's
methodology represents a "worst-case" estimate of economic impact. We
contacted each member of the panel to discuss their review of the
methodology to ensure that DOD had adequately summarized the results of
the panel meeting and that they agreed that the methodology was sound. We
and the experts agreed that DOD had adequately summarized the review
meeting and agreed that the methodology was reasonable to use.

Economic Areas Most Impacted and Least Impacted by BRAC Recommendations

In examining the economic impact of the 222 proposed recommendations as
measured by the percent of employment, most economic areas were affected
very little. Almost 83 percent of the 244 economic areas affected by BRAC
recommendations fell between a one percent loss and a one percent gain in
employment.12 Slightly more than 9 percent of the economic areas had a
negative economic impact of greater than one percent. Almost 8 percent of
the economic areas had a positive economic impact greater than one
percent. Tables 45 and 46 show the five economic areas with the

11 The methodology for the 1995 BRAC process, which was similar to the
methodology used for the 2005 BRAC process, was also reviewed by an
independent panel comprised of 6 members.

12 Some of the recommendations had multiple actions that affected more
than one economic area.

Appendix XIV Economic Impact Assessments

greatest negative employment change and the greatest positive employment
change.

 Table 45: Five Economic Areas with the Greatest Negative Impact on Employment

Changes as percentage of Economic area employment Reason for change

Clovis, NM Micropolitan Statistical -20.5 Closure of Cannon Air Force Area
Base, NM

Martin County, IN -11.6	Realignment of Naval Support Activity Crane, IN

                   Norwich-New London, CT  -9.4 Closure of Submarine Base New 
            Metropolitan Statistical Area             London, CT              
               Fairbanks, AK Metropolitan 
                         Statistical Area 

-8.6	Realignment of Eielson Air Force Base, AK

Rapid City, SD Metropolitan -8.5 Closure of Ellsworth Air Force
Statistical Area Base, SD

Source: DOD.

Note: Subsequent to the issuance of the recommendations, DOD identified an
error with the economic impact reported for Hawthorne Army Depot, Nevada.
The revised economic impact is -13.6 percent of employment and not -0.1
percent as DOD initially reported.

Table 46: Five Economic Areas with the Greatest Positive Economic Impact
on Employment

Changes as percentage of Economic area employment Gaining installation

St. Mary's, GA Micropolitan 21.9 Submarine Base Kings Bay, GA Statistical
Area

Lawton, OK Metropolitan Statistical 9.0 Fort Sill, OK Area

Columbus, GA-AL Metropolitan 8.5 Fort Benning, GA Statistical Area

Enterprise-Ozark, AL Micropolitan 7.4 Fort Rucker, AL Statistical Area

Manhattan, KS Micropolitan 6.5 Fort Riley, KS Statistical Area

Source: DOD.

Appendix XIV Economic Impact Assessments

As noted in prior reports, we examined how the communities surrounding
closed bases were faring in relation to two key national economic
indicators-the national unemployment rate and the average annual real per
capita income growth rate. In our last status report, we observed that
most communities surrounding closed bases were faring well economically in
relation to these key national economic indicators. While some communities
surrounding closed bases were faring better than others, most have
recovered or are continuing to recover from the impact of BRAC, with more
mixed results recently, allowing for some negative impact from the 2001
recession.

Appendix XV

Draft DOD Transformational Options Recommended for Approval

Appendix XV Draft DOD Transformational Options Recommended for Approval

Transformational Options

Recommend Approval:

1.	Consolidate Management at Installations with Shared Boundaries. Create
a single manager for installations that share boundaries. Source &
Application: H&SA

2.	Regionalize Installation Support. Regionalize management of the
provision of installation support activities across Military Departments
within areas of significant Department of Defense (DoD) concentration,
identified as Geographic Clusters. Option will evaluate designating
organizations to provide a range of services, regionally, as well as
aligning regional efforts to specific functions. For example, a possible
outcome might be designation of a single organization with the
responsibility to provide installation management services to DoD
installations within the statutory National Capital Region (NCR). Source
and Application: H&SA

3.	Consolidate or collocate Regional Civilian Personnel Offices to create
joint civilian personnel centers. Source and Application: H&SA

4.	Consolidate active and Reserve Military Personnel Centers of the same
service. Source and Application: H&SA

5.	Collocate active and/or Reserve Military Personnel Centers across
Military Departments. Source and Application: H&SA

6.	Consolidate same service active and Reserve local Military Personnel
Offices within Geographic Clusters. Source and Application: H&SA

7.	Collocate active and/or Reserve local Military Personnel Offices across
Military Departments located within Geographic Clusters. Source and
Application: H&SA

8.	Consolidate Defense Finance and Accounting Service (DFAS) Central and
Field Sites. Consolidate DFAS business line workload and
administrative/staff functions and locations. Source and Application: H&SA

9.	Consolidate Local DFAS Finance & Accounting (F&A). Merge/consolidate
local DFAS F&A within Geographic Clusters. Source and Application: H&SA

10.	Consolidate remaining mainframe processing and high capacity data
storage operations to existing Defense Mega Centers (Defense Enterprise
Computing Centers). Source and Application: H&SA

Appendix XV Draft DOD Transformational Options Recommended for Approval

11.	Establish and consolidate mobilization sites at installations able to
adequately prepare, train and deploy service members. Source and
Application: H&SA

12.	Establish joint pre-deployment/re-deployment processing sites. Source
and Application: H&SA

13.	Rationalize Presence in the DC Area. Assess the need for headquarters,
commands and activities to be located within 100 miles of the Pentagon.
Evaluation will include analysis of realignment of those organizations
found to be eligible to move to DoD-owned space outside of a 100-miles
radius. Source and Application: H&SA

14.	Minimize leased space across the US and movement of organizations
residing in leased space to DoD-owned space. Source and Application: H&SA

15.	Consolidate HQs at Single Locations. Consolidate multi-location
headquarters at single locations. Source and Application: H&SA

16. Eliminate locations of stand-alone headquarters. Source and
Application: H&SA

17.	Consolidate correctional facilities into fewer locations across
Military Departments. Source and Application: H&SA

18.	Collocate Reserve Component (RC) Headquarters. Determine alternative
facility alignments to support RC headquarters' administrative missions.
Alternatives could consider collocation and/or movement of RC headquarters
to operational bases. Source: H&SA Application: MILDEPS

19.	Collocate Recruiting Headquarters. Analyze alternative Recruiting
Headquarters alignments. Consider co-location of RC and Active Component
(AC) Recruiting headquarters. Source and Application: H&SA

20.	Establish a consolidated multi-service supply, storage and
distribution system that enhances the strategic deployment and sustainment
of expeditionary joint forces worldwide. Focus the analysis on creating
joint activities in heavy (US) DoD concentration areas, i.e. locations
where more than one Department is based and within close proximity to
another. Source: Supply & Storage; Application: Supply and Storage and
Industrial

21.	Privatize the wholesale storage and distribution processes from DoD
activities that perform these functions. Source and Application: Supply &
Storage

Appendix XV Draft DOD Transformational Options Recommended for Approval

22.	Migrate oversight and management of all service depot level reparables
to a single DoD agency/activity. Source and Application: Supply & Storage

23.	Decentralize Depot level maintenance by reclassifying work from
depot-level to Ilevel. Source and Application: Industrial

24.	Centralize I-level maintenance and decentralize depot-level
maintenance to the existing (or remaining) depots.

o  Eliminate over-redundancy in functions.

o  Consolidate Intermediate and Depot-level regional activities Source and
Application: Industrial

25.	Regionalize severable and similar work at the intermediate level.
Source and Application: Industrial

26.	Partnerships Expansions. Under a partnership, have government
personnel work in contractor owned/leased facilities and realign or close
facilities where personnel are currently working. Source and Application:
Industrial

27.	Collocate depots: Two Services use the same facility(s). Separate
command structures but shared common operations. Source and Application:
Industrial

28.	Consolidate similar commodities under Centers of Technical Excellence.
Source and Application: Industrial

29.	Implement concept of Vertical Integration by putting entire life cycle
at same site to increase synergies, e.g. production of raw materials to
the manufacture of finished parts, co-locating storage, maintenance and
demil. Source and Application: Industrial

30.	Implement concept of Horizontal Integration by taking some of the most
costly elements of the M&A processes and put them at the same site to
increase efficiencies, e.g. put Load, Assemble and Pack (LAP) of all
related munitions at same site. Source and Application: Industrial

31.	Maintain a multi-service distribution and deployment network
consolidating on regional joint service nodes. Source and Application:
Industrial

32.	Evaluate Joint Centers for classes and types of weapons systems and/or
technologies used by more than one Military Department:

o  Within a Defense Technology Area Plan (DTAP) Capability Area

o 	Across multiple functions (Research; Development & Acquisition; Test &
Evaluation)

Appendix XV Draft DOD Transformational Options Recommended for Approval

o  Across multiple DTAP capability areas. Source and Application:
Technical

33. Evaluate Service-Centric concentration, i.e. consolidate within each
Service:

o  Within a Defense Technology Area Plan (DTAP) capability area

o 	Across multiple functions (Research; Development & Acquisition; Test &
Evaluation)

o  Across multiple DTAP capability areas. Source and Application:
Technical

34. Privatize graduate-level education. Source and Application: Education
& Training

35.	Integrate military and DoD civilian full-time professional development
education programs. Source and Application: Education & Training

36.	36. Establish Centers of Excellence for Joint or Inter-service
education and training by combining or co-locating like schools (e.g.,
form a "DoD University" with satellite training sites provided by
Service-lead or civilian institutions). Source and Application: Education
& Training

37.	Establish "joint" officer and enlisted specialized skill training
(initial skill, skill progression & functional training). Source and
Application: Education & Training

38.	Establish a single "Center of Excellence" to provide Unmanned Aerial
Vehicle initial (a.k.a. undergraduate) training. Source and Application:
Education & Training

39.	Establish regional Cross-Service and Cross-Functional ranges that will
support Service collective, interoperability and joint training as well as
test and evaluation of weapon systems. Source and Application: Education &
Training

40.	Integrate selected range capabilities across Services to enhance
Service collective, interoperability and joint training, such as Urban
Operations, Littoral, training in unique settings (arctic, mountain,
desert, and tropical). Source and Application: Education & Training

41.	Combine Services' T&E Open Air Range (OAR) management into one joint
management office. Although organizational/managerial, this option could
engender further transformation. Joint management of OAR resources could
encourage a healthy competition among OARs to increase efficiency and
maximum utility DoD-wide. Source and Application: Education & Training

42.	Consolidate or collocate at a single installation all services'
primary phase of pilot training that uses the same aircraft (T-6). Source
and Application: Education & Training

Appendix XV Draft DOD Transformational Options Recommended for Approval

43.	Locate (division/corps) UEx and (corps/Army) UEy on Joint bases where
practical to leverage capabilities of other services (e.g., strategic lift
to enhance strategic responsiveness). Source and Application: Army

44.	Locate (brigades) Units of Action at installations DoD-wide, capable
of training modular formations, both mounted and dismounted, at home
station with sufficient land and facilities to test, simulate, or fire all
organic weapons. Source and Application: Army

45.	Collocate Army War College and Command and General Staff College at a
single location. Source: Army; Application: Education & Training

46.	Locate Special Operations Forces (SOF) in locations that best support
specialized training needs, training with conventional forces and other
service SOF units and wartime alignment deployment requirements. Source
and Application: Army

47.	Collocate or consolidate multiple branch schools and centers on single
locations (preferably with MTOE units and RDTE facilities) based on
warfighting requirements, training strategy, and doctrine, to gain
efficiencies from reducing overhead and sharing of program-of-instruction
resources. Source and Application: Army

48.	Reshape installations, RC facilities and RC major training centers to
support home station mobilization and demobilization and implement the
Train/Alert/Deploy model. Source and Application: Army

49.	Increase the number of multi-functional training areas able to
simultaneously serve multiple purposes and minimize the number of single
focus training areas for the Reserve Components where possible. Source and
Application: Army

50.	Collocate institutional training, MTOE units, RDTE organizations and
other TDA units in large numbers on single installations to support force
stabilization and enhance training. Army

51.	Locate units/activities to enhance home station operations and force
protection. Source and Application: Army

52.	Consolidate aviation training with sister services for like-type
aircraft to gain efficiencies. Source: Army; Application: all services.

53.	Collocate functions and headquarters in "Joint Campuses" to enhance
interoperability and reduce costs. Source: Army; Application: H&SA

Appendix XV Draft DOD Transformational Options Recommended for Approval

54.	Consolidate Army RDT&E organizations to capitalize on technical
synergy across DoD, academia and industry. Source: Army; Application:
Technical

55.	Reduce the number of USAR regional headquarters to reflect Federal
Reserve Restructuring Initiative (FRRI). Source and Application: Army

56.	Consolidate RDT&E functions on fewer installations through
inter-service support agreements to enable multidisciplinary efforts to
increase efficiencies and reduce redundancy within DoD. Source: Army;
Application: Technical, MilDeps.

57.	Establish a single inventory control point (ICP) within each Service
or consolidating into joint ICPs. Application: Supply and Storage

58.	Expand Guard and Reserve force integration with the Active force.
Examples: (1) Blended organizations. (2) Reserve Associate, Guard
Associate, and Active Associate (3) Sponsored Reserve. (4) Blending of
Guard units across state lines to unify mission areas, reduce
infrastructure, and improve readiness. Application: MilDeps

59.	Consolidate National Capital Region (NCR) intelligence community
activities now occupying small government facilities and privately owned
leased space to fewer, secure DoD-owned locations in the region.
Application: Intel

60.	Collocate Guard and Reserve units at active bases or consolidate the
Guard and Reserve units that are located in close proximity to one another
at one location if practical, i.e., joint use facilities. Application:
MilDeps

61.	Consolidate the Army's five separate Active Component recruit training
sites and the Marine Corps' two Active Component recruit training sites
into one recruit training installation each. Source: Education and
Training; Application: Army & Marine Corps

62.	Privatize Household Goods and Personal Property Shipping function.
Source: BENS; Application: Supply and Storage, MilDeps

63.	Privatize long-haul communications in the Defense Information Systems
Agency (DISA). Source: BENS; Application: H&SA

64. Collocate Joint Strike Fighter graduate flight training and
maintenance training.

65. Collocate Joint Strike Fighter graduate flight training.

Appendix XV Draft DOD Transformational Options Recommended for Approval

66. Collocate Joint Strike Fighter maintenance training.

67.	Consolidate aviation assets of two or more Military Services on the
same base. Application: MilDeps

68.	Collocate Service special operations units where they further reduce
infrastructure requirements and enable improved training opportunities.

69.	Collocate Service Professional Military Education (PME) schools at the
intermediate and senior levels. Application: E&T

70. Consolidate/Collocate Service specific test pilot schools.
Application: MilDeps

71. Collocate ground and signals intelligence systems. Application: Intel
& MilDeps

72. Collocate ground and airborne intelligence systems. Application: Intel
& MilDeps

73.	Consolidate pilot training and maintenance training for rotary wing
and fixed wing aircraft using Executive Agency. Application: Education and
Training.

74.	Each Military Department and Joint Cross Service Group will look at
the effects of either reducing their functions by 20%, 30%, and 40% from
the current baseline, or reducing excess capacity by an additional 5%
beyond the analyzed excess capacity, whichever is greater. The objective
of this analysis is to uncover ways in which additional gains could be
achieved, rather reasons why they could not. Source: DON; Application:
MilDeps and JCSGs

75.	Establish a "space test range" for satellite ground testing, threat
assessment, and tactics development. Elements of the "range" should be
networked using a minimum number of ground facilities to virtually
simulate on-orbit operations. Source and Application: Air Force

76.	Establish an Army Joint Network Science Technology and Experimentation
Center to fully realize the transformational capabilities of
interdependent Joint Network Centric Warfare. Source: Army; Application:
Technical

77.	Air Force use optimum flying squadron sizing and organizational
constructs to disproportionately increase combat capability and transform
the capability of its AEFs. Source and Application: Air Force

Appendix XVI

Key GAO and Other Defense Audit Agency Products Related to DOD's 2005 Base
Realignments and Closures

Government Accountability Office

Military Base Closures: Observations on Prior and Current BRAC Rounds.
GAO-05-614. Washington, D.C.: May 3, 2005.

Military Base Closures: Updated Status of Prior Base Realignments and
Closures. GAO-05-138. Washington, D.C.: January 13, 2005.

Military Base Closures: Assessment of DOD's 2004 Report on the Need for a
Base Realignment and Closure Round. GAO-04-760. Washington, D.C.: May 17,
2004.

Military Base Closures: Observations on Preparations for the Upcoming Base
Realignment and Closure Round. GAO-04-558T. Washington, D.C.: March 25,
2004.

Military Base Closures: DOD's Updated Net Savings Estimate Remains
Substantial. GAO-01-971. Washington, D.C.: July 31, 2001.

Military Bases: Lessons Learned from Prior Base Closure Rounds.

GAO/NSIAD-97-151. Washington, D.C.: July 25, 1997.

Military Bases: Analysis of DOD's 1995 Process and Recommendations for
Closure and Realignment. GAO/NSIAD-95-133. Washington, D.C.: April 14,
1995.

Department of Defense Office of Inspector General

Infrastructure and Environment: Technical Joint Cross-Service Group Data
Integrity and Internal Control Processes for Base Realignment and Closure
2005. D-2005-086. Washington, D.C.: June 17, 2005.

Defense Infrastructure: Education and Training Joint Cross-Service Group
Data Integrity and Internal Control Processes for Base Realignment and
Closure 2005. D-2005-084. Arlington, Va.: June 10, 2005.

Defense Infrastructure: Industrial Joint Cross-Service Group Data
Integrity and Internal Control Processes for Base Realignment and Closure
2005. D-2005-082. Arlington, Va.: June 9, 2005.

Infrastructure and Environment: Washington Headquarters Services Data Call
Submissions and Internal Control Processes for Base Realignment and
Closure 2005. D-2005-079. Arlington, Va.: June 8, 2005.

                                  Appendix XVI
                     Key GAO and Other Defense Audit Agency
                      Products Related to DOD's 2005 Base
                           Realignments and Closures

Defense Infrastructure: Supply and Storage Joint Cross-Service Group Data
Integrity and Internal Control Processes for Base Realignment and Closure
2005. D-2005-081. Arlington, Va.: June 6, 2005.

Infrastructure and Environment: Defense Finance and Accounting Service
Data Call Submissions and Internal Control Processes for Base Realignment
and Closure 2005. D-2005-075. Arlington, Va.: May 27, 2005.

DOD Inspector General plans to issue reports on the Defense Logistics
Agency, the Headquarters and Support Activities Joint Cross-Service Group,
and the Medical Joint Cross-Service Group.

                 Department of the Army U.S. Army Audit Agency

Reserve Component Process Action Team, The Army Basing Study 2005.
A-2005-0165-ALT. Alexandria, Va.: April 29, 2005.

The Army Basing Study 2005 Process. A-2005-0164-ALT. Alexandria, Va.:
April 22, 2005.

Validation of Army Responses for Joint Cross-Service Group Questions.

A-2005-0169-ALT. Alexandria, Va.: April 22, 2005.

Army Military Value Data, The Army Basing Study 2005. A-2005-0083-ALT.
Alexandria, Va.: December 21, 2004.

Army Capacity Data, The Army Basing Study 2005. A-2005-0056-ALT.
Alexandria, Va.: November 30, 2004.

Cost of Base Realignment Actions (COBRA) Model. A-2004-0544-IMT.
Alexandria, Va.: September 30, 2004.

Department of the Navy Naval Audit Service

The Department of the Navy's Implementation of the FY 2005 Base
Realignment and Closure Process. N2005-0046. Washington, D.C.: June 10,
2005.

Risk Assessment of the Department of the Navy Base Realignment and Closure
2005 Information Transfer System. N2005-0042. Washington, D.C.: April 25,
2005.

Base Realignment and Closure Optimization Methodology. N2004-0058.
Washington, D.C.: June 16, 2004.

                                  Appendix XVI
                     Key GAO and Other Defense Audit Agency
                      Products Related to DOD's 2005 Base
                           Realignments and Closures

Department of the Air Force Air Force Audit Agency

BRAC Cueing and Analysis Tools. F2005-0007-FB2000. Washington, D.C.: June
22, 2005.

2005 Base Realignment and Closure-Installation Visualization Tool Data
Reliability. F2005-0004-FB4000. Washington, D.C.: June 16, 2005.

Base Realignment and Closure Data Collection System. F2004-0008-FB40000.
Washington, D.C.: September 27, 2004.

2005 Base Realignment and Closure: Installation Capacity Analysis
Questionnaire. F2004-0007-FB4000. Washington, D.C.: August 24, 2004.

2005 Base Realignment and Closure: Installations Inventory.
F2004-0005-FB4000. Washington, D.C.: April 12, 2004.

2005 Base Realignment and Closure: Air Force Internal Control Plan.

F2004-0001-FB4000. Washington, D.C.: December 29, 2003.

The Air Force Audit Agency plans to release 7 additional reports on the
Air Force and joint cross-service group data collection, the Air Force
analysis, and the use of various BRAC tools.

Appendix XVII

                     GAO Contact and Staff Acknowledgments

GAO Contact Barry W. Holman (202) 512-5581

Acknowledgments	In addition to the individual named above, Mike Kennedy,
Jim Reifsnyder, Nelsie Alcoser, Shawn Arbogast, Raymond Bickert, Alissa
Czyz, Andrew Edelson, Glenn Knoepfle, Nancy Lively, Warren Lowman, Tom
Mahalek, David Mayfield, Richard Meeks, Hilary Murrish, Charles Perdue,
Robert Poetta, James Reynolds, Laura Talbott, and Cheryl Weissman made key
contributions to this report.

Other individuals also contributing to this report included, Tommy Baril,
Carl Barden, Angela Bourciquot, Steve Boyles, Delaney Branch, Joel
Christenson, Kenneth Cooper, Paul Gvoth, Larry Junek, Mark Little, Philip
Longee, Ricardo Marquez, Gary Phillips, Greg Pugnetti, Sharon Reid, John
Strong, Roger Tomlinson, and Kimberly Young.

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