Military Base Realignments and Closures: Cost Estimates Have	 
Increased and Are Likely to Continue to Evolve (11-DEC-07,	 
GAO-08-159).							 
                                                                 
The 2005 Base Realignment and Closure (BRAC) round is the	 
biggest, most complex, and costliest ever. DOD viewed this round 
as a unique opportunity to reshape its installations, realign	 
forces to meet its needs for the next 20 years, and achieve	 
savings. To realize savings, DOD must first invest billions of	 
dollars in facility construction, renovation, and other up-front 
expenses to implement the BRAC recommendations. However, recent  
increases in estimated cost have become a concern to some members
of Congress. Under the Comptroller General's authority to conduct
evaluations on his own initiative, GAO (1) compared the BRAC	 
Commission's cost and savings estimates to DOD's current	 
estimates, (2) assessed potential for change in DOD's current	 
estimates, and (3) identified broad implementation challenges.	 
GAO compared the BRAC Commission's estimates, which were the	 
closest estimates available associated with final BRAC		 
recommendations, to DOD's current estimates. GAO also visited 25 
installations and major commands, and interviewed DOD officials. 
-------------------------Indexing Terms------------------------- 
REPORTNUM:   GAO-08-159 					        
    ACCNO:   A78790						        
  TITLE:     Military Base Realignments and Closures: Cost Estimates  
Have Increased and Are Likely to Continue to Evolve		 
     DATE:   12/11/2007 
  SUBJECT:   Base closures					 
	     Base realignments					 
	     Cost analysis					 
	     Cost control					 
	     Defense budgets					 
	     Defense cost control				 
	     Interagency relations				 
	     Military bases					 
	     Military budgets					 
	     Military cost control				 
	     Military facilities				 
	     Military facility construction			 
	     Military personnel 				 
	     Program evaluation 				 
	     Strategic planning 				 
	     Cost estimates					 
	     Program coordination				 
	     Program implementation				 
	     DOD Base Realignment and Closure Program		 

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GAO-08-159

   

     * [1]Results in Brief
     * [2]Background
     * [3]DOD Plans to Spend More and Save Less Than Originally Estima

          * [4]DOD Plans to Spend More and Save Less Than Originally Estima

               * [5]Estimated One-time Costs Have Increased
               * [6]Savings Estimates Have Decreased

          * [7]DOD Will Take Longer to Recoup Up-Front Costs Than the BRAC

     * [8]DOD's Estimates to Implement BRAC Recommendations Will Likel

          * [9]Details for Several Key Recommendations Are Uncertain and Es
          * [10]Military Construction Costs Could Increase
          * [11]Environmental Cleanup Costs Are Preliminary and Likely to In
          * [12]Annual Recurring Savings Estimates May be Overstated

     * [13]DOD Has Made Progress Implementing BRAC, but Several Challen

          * [14]DOD Has Made Progress Implementing BRAC
          * [15]Challenges in Synchronizing Many BRAC Actions Could Hinder D

               * [16]DOD Must Synchronize Personnel Movements with
                 Construction T
               * [17]Some Recommendations Are Dependent on the Completion of
                 Othe
               * [18]Some Installations Affected by Multiple Recommendations
               * [19]Force Structure Initiatives Further Complicate DOD's
                 BRAC Im

          * [20]Coordination Among Multiple Services and Agencies Presents A

     * [21]Conclusion
     * [22]Recommendation for Executive Action
     * [23]Agency Comments and Our Evaluation
     * [24]GAO Contact
     * [25]Acknowledgments
     * [26]GAO's Mission
     * [27]Obtaining Copies of GAO Reports and Testimony

          * [28]Order by Mail or Phone

     * [29]To Report Fraud, Waste, and Abuse in Federal Programs
     * [30]Congressional Relations
     * [31]Public Affairs

Report to Congressional Addressees

United States Government Accountability Office

GAO

December 2007

MILITARY BASE REALIGNMENTS AND CLOSURES

Cost Estimates Have Increased and Are Likely to Continue to Evolve

GAO-08-159

Contents

Letter 1

Results in Brief 4
Background 7
DOD Plans to Spend More and Save Less Than Originally Estimated and Will
Take Longer Than Expected to Recoup Up-Front Costs 12
DOD's Estimates to Implement BRAC Recommendations Will Likely Continue to
Evolve, and Savings Estimates May be Overstated 21
DOD Has Made Progress Implementing BRAC, but Several Challenges Increase
Risk That All Recommendations Might Not be Completed by the Statutory
Deadline 30
Conclusion 41
Recommendation for Executive Action 41
Agency Comments and Our Evaluation 41
Appendix I Scope and Methodology 45
Appendix II BRAC Recommendations with the Largest Increases in Estimated
Costs 49
Appendix III BRAC Recommendations with the Largest Decreases in Estimated
Net Annual Recurring Savings 51
Appendix IV BRAC Recommendations DOD Expects to Cost the Most 52
Appendix V BRAC Recommendations DOD Expects to Save the Most Annually 54
Appendix VI BRAC Recommendations DOD Expects to Save the Most Over a
20-Year Period 56
Appendix VII Comments from the Department of Defense 58
Appendix VIII GAO Contact and Staff Acknowledgments 61
Related GAO Products 62

Tables

Table 1: Comparison of BRAC Cost and Savings Estimates 13
Table 2: Army Installations Expecting Net Gains of at Least 5,000
Personnel for Fiscal Years 2006 through 2011 Due to BRAC, Overseas
Rebasing, Modularity, and Other Miscellaneous Restationing Actions (as of
March 2007) 38
Table 3: BRAC Recommendations That Increased by More Than $50 Million in
Estimated One-Time Costs (Fiscal Years 2006 through 2011) 49
Table 4: BRAC Recommendations That Have Decreased by More Than $25 Million
in Estimated Net Annual Recurring Savings (Projected for Fiscal Year 2012)
51
Table 5: BRAC Recommendations DOD Expects to Cost the Most to Implement
(Fiscal Years 2006 through 2011) 52
Table 6: BRAC Recommendations DOD Expects to Save the Most Annually After
Implementation (Projected for Fiscal Year 2012) 54
Table 7: BRAC Recommendations DOD Expects to Save the Most Over a 20-Year
Period (Fiscal Years 2006 through 2025) 56

Figures

Figure 1: DOD's Selection Criteria for the BRAC 2005 Round 7
Figure 2: DOD's Review Process of the BRAC 2005 Business Plans 11
Figure 3: Comparison of Time to Recoup BRAC Costs Using BRAC Commission
and DOD's Data 20
Figure 4: Sequencing of Personnel Movement for Several Interdependent BRAC
Recommendations 35

Abbreviations

BRAC Base Realignment and Closure
COBRA Cost of Base Realignment Actions
DOD Department of Defense
OSD Office of the Secretary of Defense
USACE United States Army Corps of Engineers

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United States Government Accountability Office
Washington, DC 20548

December 11, 2007

Congressional Addressees

The Department of Defense (DOD) is currently implementing recommendations
resulting from the 2005 Base Realignment and Closure (BRAC) round. BRAC
2005 is the fifth round undertaken by DOD since 1988 and, by our
assessment, is the biggest, most complex, and costliest BRAC round ever.
With this BRAC round, DOD plans to execute over 800 BRAC actions, relocate
over 123,000 personnel, and spend over $31 billion--an unprecedented
amount, given that DOD has spent about $24 billion to date to implement
the four previous BRAC rounds combined. DOD viewed the BRAC 2005 round as
not only an opportunity to achieve savings but also as a unique
opportunity to reshape its installations and realign its forces to meet
its needs for the next 20 years. The Secretary of Defense made clear at
the outset that his primary goal for the 2005 BRAC round was military
transformation. As such, many of the BRAC 2005 recommendations involve
complex realignments such as designating where forces returning to the
United States from overseas bases would be located; establishing joint
medical centers; creating joint bases; and reconfiguring the defense
supply, storage, and distribution network. However, anticipated savings
resulting from BRAC implementation remained an important consideration and
was a factor in justifying the need for the 2005 BRAC round.1 The
Department of Defense (DOD) is currently implementing recommendations
resulting from the 2005 Base Realignment and Closure (BRAC) round. BRAC
2005 is the fifth round undertaken by DOD since 1988 and, by our
assessment, is the biggest, most complex, and costliest BRAC round ever.
With this BRAC round, DOD plans to execute over 800 BRAC actions, relocate
over 123,000 personnel, and spend over $31 billion--an unprecedented
amount, given that DOD has spent about $24 billion to date to implement
the four previous BRAC rounds combined. DOD viewed the BRAC 2005 round as
not only an opportunity to achieve savings but also as a unique
opportunity to reshape its installations and realign its forces to meet
its needs for the next 20 years. The Secretary of Defense made clear at
the outset that his primary goal for the 2005 BRAC round was military
transformation. As such, many of the BRAC 2005 recommendations involve
complex realignments such as designating where forces returning to the
United States from overseas bases would be located; establishing joint
medical centers; creating joint bases; and reconfiguring the defense
supply, storage, and distribution network. However, anticipated savings
resulting from BRAC implementation remained an important consideration and
was a factor in justifying the need for the 2005 BRAC round.1

Unlike prior BRAC rounds, which were implemented during times of declining
defense budgets and where the focus was on eliminating excess capacity and
realizing cost savings, the 2005 BRAC round is being implemented during a
time of conflict when many military capabilities are surging and DOD is
also implementing or planning to implement other extensive worldwide
transformation initiatives. For example, at the same time DOD is to
implement the most recent round of BRAC, it is relocating about 50,000
soldiers2 from primarily Europe and Korea to the United Unlike prior BRAC
rounds, which were implemented during times of declining defense budgets
and where the focus was on eliminating excess capacity and realizing cost
savings, the 2005 BRAC round is being implemented during a time of
conflict when many military capabilities are surging and DOD is also
implementing or planning to implement other extensive worldwide
transformation initiatives. For example, at the same time DOD is to
implement the most recent round of BRAC, it is relocating about 50,000
soldiers2 from primarily Europe and Korea to the United States,
transforming the Army's force structure from an organization based on
divisions to more rapidly deployable, brigade-based units, and seeks to
increase its active end strength by 92,000,3 all of which will affect
DOD's facility infrastructure. Consequently, when evaluating DOD's
candidate BRAC recommendations, the BRAC Commission4 focused not only on
costs and savings but also on DOD's future force structure, the ongoing
conflicts in Iraq and Afghanistan, and military transformation. In
addition, both DOD and the BRAC Commission reported that their primary
consideration in making recommendations for the 2005 round was military
value.5 To realize savings from BRAC, DOD must first invest billions of
dollars in facility construction, renovation, and other up-front expenses
to implement the BRAC recommendations. However, some members of Congress
have expressed concerns about DOD's increased up-front cost estimates to
implement the BRAC 2005 recommendations.

1 In a 2001 testimony before Congress, the Secretary of Defense stated
that another BRAC round would generate recurring savings the department
could use for other higher-priority defense programs.

2 About 15,000 of these soldiers are included in the 123,000 personnel
mentioned above. Army plans to relocate the remaining soldiers in
realignment actions not related to BRAC.

This report is one in a series of reports we have undertaken on BRAC 2005
implementation. These reports have identified complex challenges to
implementing recommendations from this BRAC round, including retraining
personnel to new missions, completing many construction projects in a
compressed time frame, and synchronizing personnel movements with planned
infrastructure improvements. We also reported that Congress does not have
full visibility over the total expected cost of DOD's BRAC-related
environmental cleanup efforts, several Air National Guard recommendations
are expected to result in annual costs instead of annual savings, and
DOD's cost estimates for implementing recommendations related to the
Army's reserve components have increased while savings estimates have
decreased. A listing of our related products is at the end of this report.

3 The Army plans to seek an increase in its active-duty end strength by
65,000, and the Marine Corps plan to seek an increase in its active-duty
end strength by 27,000 over the next several years.

4 BRAC legislation (Pub. L. No. 101-510, Title XXIX, as amended by Pub. L.
No. 107-107, Title XXX) provided for an independent commission to review
the Secretary of Defense's realignment and closure recommendations and the
commission had the authority to change these recommendations if it
determined that the Secretary deviated substantially from the legally
mandated selection criteria. The Defense Base Closure and Realignment
Commission (referred to in this report as the BRAC Commission) presented
its list of final recommendations to the President of the United States,
who approved them in their entirety. The President subsequently forwarded
these BRAC recommendations to Congress, and they became effective on
November 9, 2005.

5 Military value refers to one or more of the first four BRAC selection
criteria (see fig. 1), which includes such considerations as an
installation's current and future mission capabilities, condition, ability
to accommodate future needs, and cost of operations. Whereas in prior
rounds, military value was a priority consideration, along with costs and
savings, economic impact to local communities, and other concerns, the
National Defense Authorization Act for Fiscal Year 2002 directed DOD to
consider military value above all other criteria in the BRAC 2005 round.
Pub. L. No. 107-107, S 3002 (2001).

As with most of our BRAC-related work, we initiated this review under the
authority of the Comptroller General to conduct evaluations on his own
initiative6 and are reporting the results of our evaluation to you because
of your oversight role of DOD's infrastructure and the BRAC program. We
are also reporting the results of our work as a result of direction by the
House Armed Services Committee to report annually on DOD's implementation
of BRAC 2005.7 Our objectives are to (1) compare cost and savings
estimates in the BRAC Commission's report to DOD's current cost and
savings estimates, (2) assess the potential for further change in DOD's
estimated costs and savings related to implementing BRAC 2005
recommendations, and (3) identify broad challenges that could affect the
implementation of these recommendations and DOD's ability to meet the
statutory 6-year completion period.8

To address these objectives, we interviewed officials in the Office of the
Deputy Under Secretary of Defense for Installations and Environment and
associated BRAC implementation offices in the Army, Navy, and Air Force.
To analyze BRAC cost and savings estimates, we compared the change in
these estimates using mostly information in two publicly available
documents--the BRAC Commission's report to the President dated September
2005 and DOD's latest BRAC budget submission to Congress dated February
2007--because they provided the most authoritative financial information
publicly available. Also, we compared the BRAC Commission's estimates,
which were the closest estimates available associated with final BRAC
recommendations, to DOD's current budgeted estimates. To analyze net
annual recurring savings estimates, we used OSD's savings data for fiscal
year 2012--the fiscal year after DOD expects to complete all BRAC
recommendations--because it more fully captured the expected savings and
allowed us to replicate the same methodology used by the BRAC Commission
in its calculation of this estimate. We generally reported costs and
savings in current dollars and not constant dollars except where noted.
Given the unprecedented number of BRAC 2005 closures and realignments, we
focused our analysis on broad issues affecting DOD's cost and savings
estimates and implementation challenges rather than on specific
implementation issues of individual recommendations. In addition, we
visited 17 installations and 8 major commands affected by some of the more
costly BRAC realignments or closures to obtain the perspective of
officials directly involved in BRAC implementation planning and execution.
Overall, we determined that the data to support our objectives were
sufficiently reliable for the purposes of making broad comparisons between
the BRAC Commission and DOD's cost and savings estimates and identifying
implementation challenges.

6 31 U.S.C. S 717.

7 H.R. Rep. No. 110-146, at 514 (2007).

8 Pub. L. No. 101-510, S 2904(a)(5), as amended, provides that the
Secretary shall complete all such closures and realignments no later than
the end of the 6-year period beginning on the date on which the President
transmits the report pursuant to section 2903(e) containing the
recommendations for such closures or realignments.

We conducted our work from November 2005, when the BRAC recommendations
became effective, through October 2007, so we could analyze data in DOD's
BRAC budget submission provided to Congress in February 2007. Our work was
conducted in accordance with generally accepted government auditing
standards. Further details on our scope and methodology are described in
appendix I.

Results in Brief

Since the BRAC Commission issued its BRAC cost and savings projections in
2005, DOD plans to spend more and save less to implement the BRAC
Commission's recommendations, and it will take the department longer than
expected to recoup up-front costs. DOD's cost estimates to implement these
recommendations have increased from $21 billion to $31 billion (48
percent) compared to the BRAC Commission's estimates, and net annual
savings estimates have decreased from $4.2 billion to $4 billion (5
percent) compared to the BRAC Commission's estimates.9 Our analysis
further shows that DOD's estimated one-time costs to implement nearly 1/5
of the 2005 BRAC recommendations have increased by more than $50 million
each compared to the BRAC Commission's estimates. Of these, the estimated
costs to implement six recommendations have increased by more than $500
million each. Moreover, our analysis of DOD's current estimates shows that
it will take until 2017 for DOD to recoup its up-front costs to implement
BRAC recommendations--4 years longer than the BRAC Commission's estimate.
Similarly, the BRAC Commission estimated that BRAC 2005 would save DOD
about $36 billion over a 20-year period ending in 2025, whereas our
analysis shows BRAC implementation is now expected to save about $15
billion during this 20-year time period, a decrease of 58 percent, because
BRAC cost estimates have increased and savings estimates have decreased.
OSD BRAC officials told us that, although the 20-year savings estimate is
less than the BRAC Commission expected, the department expects the
implementation of this BRAC round to produce capabilities that will
enhance defense operations and management, despite less than anticipated
savings. In addition, both DOD and the BRAC Commission used an estimation
model, known as the Cost of Base Realignment Actions (COBRA), to assess
the costs and savings of proposed BRAC recommendations during the
decision-making process. The COBRA model relied to a large extent on
standard factors and averages and was not intended to represent
budget-quality estimates. As a result, neither DOD's nor the BRAC
Commission's cost and savings estimates can be assumed to represent the
actual completion costs that Congress will need to fund through
appropriations or fully reflect the savings to be achieved after
implementation.

9 The BRAC Commission reported its estimates in constant fiscal year 2005
dollars (i.e., excludes projected inflation), while DOD reported BRAC
estimates in the fiscal year 2008 BRAC budget submission to Congress in
current dollars (i.e., includes projected inflation).

DOD's estimated costs and savings to implement the recommendations from
the latest BRAC round are likely to change further due to uncertainties
surrounding certain implementation details for some recommendations,
potential increases in military construction costs, and likely increases
in the cost of environmental cleanup for some BRAC properties. Moreover,
we believe that DOD may have overstated its net annual savings estimates
by about 46 percent or $1.85 billion. DOD's estimated net annual recurring
savings of about $4 billion includes $2.17 billion in eliminated overhead
expenses, which will free up funds that DOD can then use for other
priorities. However, DOD's net annual recurring savings estimate also
includes $1.85 billion in military personnel entitlements--such as
salaries and housing allowances--for personnel DOD plans to transfer to
other locations rather than eliminate. While DOD disagrees with us, we do
not believe that transferring military personnel produces tangible dollar
savings outside the military personnel accounts since these personnel will
continue to receive salaries and benefits. Because DOD's BRAC budget
submission to Congress does not explain the difference between net annual
recurring savings attributable to military personnel entitlements and net
annual recurring savings that will make funds available for other uses,
DOD is generating a false sense that all of its reported savings could be
used to fund other defense priorities.

DOD has made progress in planning for BRAC 2005 implementation, but
several complex challenges to the implementation of those plans increase
the risk that DOD might not meet the September 2011 statutory deadline. By
statute, DOD must complete the recommendations for closing or realigning
bases made in the BRAC 2005 round within 6 years from the date the
President submitted to Congress his approval of the BRAC Commission's
recommendations. Although DOD has completed several BRAC actions already,
the department faces a number of challenges related to the synchronization
and coordination involved in implementing some key recommendations. For
example, the realignment of over 123,000 military and civilian personnel
must be carefully synchronized with the completion of over $21 billion in
new construction or renovation projects to support them. In addition, some
recommendations are dependent on the completion of other recommendations
before facilities can be renovated for new uses, and some DOD
installations are affected by more than six BRAC recommendations. Delays
in completing some interrelated actions could cause a domino effect that
might jeopardize DOD's ability to meet the statutory 2011 BRAC deadline.10
In addition, our analysis shows that 43 percent of DOD's 240 business
plans for implementing BRAC recommendations involve formal coordination
between at least two military services or defense agencies. Such joint
recommendations involving more than one military component have created
challenges in achieving unity of effort.

This report contains a recommendation that DOD explain its annual
recurring savings attributable to military personnel entitlements in its
budget submission to Congress, thus providing more transparency over these
savings. In commenting on a draft of this report, the department concurred
with our recommendation and agreed to include an explanation of the annual
recurring savings in its BRAC budget justification material that
accompanies the annual President's budget. Also, DOD noted that although
net annual recurring savings have decreased from $4.2 billion to $4
billion, these estimated savings still represent a significant benefit
that will result from the implementation of BRAC recommendations. DOD's
written comments are reprinted in appendix VII. DOD also provided
technical comments, which we have incorporated into this report as
appropriate.

10 Pub. L. No. 101-510, S 2904, as amended (1990).

Background

DOD has undergone four BRAC rounds since 1988 and is currently
implementing its fifth round.11 For the most recent BRAC round--referred
to in this report as the BRAC 2005 round--DOD applied legally mandated
selection criteria that included four criteria related to military value
as well as other criteria regarding costs and savings, economic impact to
local communities, community support infrastructure, and environmental
impact, as shown in figure 1.

Figure 1: DOD's Selection Criteria for the BRAC 2005 Round

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.                   
                                                                              
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: Pub. L. No. 101-510, S 2913.

In applying these BRAC 2005 selection criteria, priority consideration was
given to military value. In fact, as required by BRAC legislation,
military value was the primary consideration for making BRAC
recommendations, as reported by both DOD and the BRAC Commission. DOD also
incorporated into its analytical process several key considerations
required by BRAC legislation, including the use of certified data and
basing its analysis on its 20-year force structure plan.12 In commenting
on DOD's BRAC process in July 2005, we reported that DOD established and
generally followed a logical and reasoned process for formulating its list
of BRAC recommendations.13 Using this analytical process, the Office of
the Secretary of Defense (OSD) provided over 200 BRAC recommendations to
the BRAC Commission for an independent assessment in May 2005. The BRAC
Commission had the authority to change the Secretary's recommendations if
it determined that the Secretary deviated substantially from the legally
mandated selection criteria and DOD's force structure plan. After
assessing OSD's recommendations, the BRAC Commission stated that it
rejected 13 recommendations in their entirety and significantly modified
another 13. Ultimately, the BRAC Commission forwarded a list of 182
recommendations for base closure or realignment to the President for
approval. The BRAC Commission's recommendations were accepted in their
entirety by the President and Congress and became effective November 9,
2005.14 The BRAC legislation requires DOD to complete recommendations for
closing or realigning bases made in the BRAC 2005 round within a 6-year
time frame ending September 15, 2011, 6 years from the date the President
submitted to Congress his approval of the recommendations.

11 The first round in 1988 was completed under the Defense Authorization
Amendments and Base Closure and Realignment Act (Pub. L. No. 100-526,
Title II, as amended (1988)). Subsequently, additional BRAC rounds were
completed in 1991, 1993, and 1995 as authorized in the Defense Base
Closure and Realignment Act of 1990 (Pub .L. No.101-510, Title XXIX, as
amended (1990)). The latest round--BRAC 2005--was authorized in the
National Defense Authorization Act for Fiscal Year 2002 (Pub. L. No.
107-107, Title XXX, (2001)).

To provide a framework for promoting consistency in estimating the costs
and savings associated with various proposed BRAC recommendations, DOD
used an estimation model, known as the Cost of Base Realignment Actions
(COBRA).15 The COBRA model has been used in the base closure process since
1988. It provided important financial information to the selection process
as decision makers weighed the financial implications for various BRAC
actions along with military value and other selection criteria when
arriving at final decisions regarding the suitability of BRAC
recommendations.16 In addition, the department designed the model to
calculate estimated costs and savings associated with actions that are
necessary to implement BRAC recommendations over the 6-year implementation
period and to calculate recurring costs or savings thereafter. As such,
the BRAC Commission continued to use DOD's COBRA model for making its cost
and savings estimates.

12 Specified DOD personnel are required 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. Pub. L. No. 101-510, S 2903(c)(5). The force structure plan is
the numbers, size, and composition of the units that comprise U.S. forces,
for example, divisions, air wings, aircraft, tanks, and so forth. Pub. L.
No. 101-510, S 2912(a)(1)(A).

13 GAO, Military Bases: Analysis of DOD's 2005 Selection Process and
Recommendations for Base Closures and Realignments, [32]GAO-05-785
(Washington, D.C.: July 1, 2005).

14 The President was required to approve or disapprove the BRAC
Commission's recommendations in their entirety by September 23, 2005.
After they were approved, the recommendations were forwarded to Congress,
which had 45 days or until adjournment of Congress to disapprove the
recommendations on an all-or-none basis; otherwise, the recommendations
became effective.

The COBRA model relies to a large extent on standard factors and averages
but is not intended to--and consequently does not--represent
budget-quality estimates. As a result, neither DOD's or the BRAC
Commission's COBRA-generated estimates can be assumed to represent the
actual completion costs that Congress will need to fund through
appropriations or fully reflect the savings to be achieved after
implementation. We have examined COBRA in the past and have found it to be
a generally reasonable estimator for comparing potential costs and savings
among candidate alternatives but have not considered it a tool for use in
budgeting.17 In the intervening years, COBRA has been revised to address
certain problems we and others have identified after each round. As with
any model, the quality of the output is dependent on the quality of the
input. For example, a DOD analyst could assume a building could be
renovated to accommodate receiving personnel; however, when BRAC
implementation began, site surveys showed that the building could not be
renovated, thus requiring new construction that increased estimated costs.
The model provides a standard quantitative approach to comparing estimated
costs and savings across various proposed recommendations. In this and
previous BRAC rounds, DOD subsequently developed budget-quality estimates
once BRAC recommendations became effective. Thus, the BRAC Commission's
estimated implementation costs and savings were useful for comparing
candidate recommendations and DOD has subsequently refined these estimates
based on better information after conducting site surveys.

15 The COBRA model provided for several key outputs such as (1) estimated
one-time costs for such factors as military construction, personnel
severance, or moving costs over the implementation period; (2) estimated
savings for such factors as personnel reductions or eliminations, or
reduced operations and maintenance costs; (3) savings that are expected to
occur annually after the implementation period; (4) the payback period for
estimating when total savings will exceed total costs; and (5) the 20-year
savings, also known as net present value, of implementing BRAC actions.

16 Pub. L. No. 101-510, S 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.

17 GAO, Military Bases: Analysis of DOD's 2005 Selection Process and
Recommendations for Base Closures and Realignments, [33]GAO-05-785
(Washington, D.C.: July 1, 2005) and Military Bases: Analysis of DOD's
1995 Process and Recommendations for Closure and Realignment,
[34]GAO/NSIAD-95-133 (Washington, D.C.: Apr. 14, 1995).

BRAC legislation requires DOD to submit an annual schedule containing
revised BRAC cost and savings estimates for each closure and realignment
recommendation to Congress. To meet this legislative requirement, DOD
presents its schedule in its annual BRAC budget submission to Congress.
For BRAC 2005 recommendations, DOD's first presentation of its cost and
savings schedule was in its fiscal year 2007 budget submission to Congress
in March 2006. However, the department stated in its submission that it
did not have enough time to formulate a reasonable BRAC budget and that
the fiscal year 2007 BRAC budget submission contained significant funding
shortfalls. DOD's second presentation of its cost and savings schedule was
its fiscal year 2008 BRAC budget submission to Congress in February 2007.

For the BRAC 2005 round, the OSD BRAC Office--under the oversight of the
Under Secretary of Defense for Acquisition, Technology and Logistics--has
monitored the services' and defense agencies' implementation progress,
analyzed budget justifications for significant differences in cost and
savings estimates, and facilitated the resolution of any challenges that
may impair the successful implementation of the recommendations within the
6-year completion period. To facilitate its oversight role, OSD required
the military departments and certain defense agencies to submit a detailed
business plan for each of their recommendations. These business plans
include information such as a listing of all actions needed to implement
each recommendation, schedules for personnel movements between
installations, updated cost and savings estimates based on better and
updated information, and implementation completion time frames.18 OSD's
general process for reviewing business plans is shown in figure 2.

Figure 2: DOD's Review Process of the BRAC 2005 Business Plans

aOSD BRAC Office oversees the planning and execution of the BRAC 2005
program.

bThe Secretary of Defense established the Infrastructure Steering Group to
oversee the BRAC 2005 process. The group is 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, the
Deputy Under Secretary of Defense (Installations and Environment), and the
Military Department Assistant Secretaries for Installations and
Environment.

OSD BRAC officials consider their business plans to be living documents
that will evolve over the course of the 6-year implementation period.
Additionally, OSD's General Counsel assesses whether the business plans
meet the intent of the BRAC Commission's recommendations.

18 OSD assigned one of the military services or a defense agency to take
the lead in developing business plans for each recommendation or a
distinct part of a recommendation. For recommendations affecting multiple
services or defense agencies, the military service or defense agency with
facility management authority at the gaining site usually prepared the
business plan.

DOD Plans to Spend More and Save Less Than Originally Estimated and Will Take
Longer Than Expected to Recoup Up-Front Costs

Compared to the BRAC Commission's estimates, DOD plans to spend more and
save less to implement BRAC recommendations than the BRAC Commission
originally estimated, and it will take longer than expected for DOD to
recoup its up-front costs. Since the BRAC Commission issued its cost and
savings estimates in 2005, DOD's reported estimates of the costs to
implement about 180 BRAC recommendations have increased by $10 billion to
about $31.2 billion while annual savings estimates have decreased by about
$200 million--$4.2 billion to $4 billion. Moreover, our analysis of DOD's
current estimates shows that it will take until 2017 for the department to
recoup its up-front costs to implement BRAC recommendations--4 years
longer than the BRAC Commission's estimates indicate this would happen.
Similarly, whereas the BRAC Commission estimated that the implementation
of the BRAC 2005 recommendations would save DOD about $36 billion over a
20-year period ending in 2025, BRAC implementation is now expected to save
about $15 billion, a decrease of 58 percent.

DOD Plans to Spend More and Save Less Than Originally Estimated

Since the BRAC Commission issued its cost and savings projections in 2005,
cost estimates to implement the BRAC 2005 recommendations have increased
from $21 billion to $31 billion (48 percent) compared to the BRAC
Commission's reported estimates19 and net annual recurring savings
estimates have decreased from $4.2 billion to $4 billion (5 percent)
compared to the BRAC Commission's reported estimates as shown in table 1.

19 The BRAC Commission forwarded 182 BRAC recommendations to the President
who approved them in their entirety. Our analysis shows DOD requested
funds to implement 175 recommendations because 7 recommendations do not
involve implementation costs for various reasons.

Table 1: Comparison of BRAC Cost and Savings Estimates

Dollars in millions        
                                                                Difference
                                BRAC Commission's       DOD's                 
Category                   reported estimatesa  estimatesb  Amount Percent 
One-time costs during                                                      
implementation                                                             
                                                                              
(fiscal years 2006 through                                                 
2011)                                  $21,025     $31,160 $10,135      48 
Net annual recurring                                                       
savings after                                                              
implementation                                                             
                                                                              
(fiscal years 2012 through                                                 
2025)                                    4,225       4,014   (212)     (5) 

Source: GAO analysis of BRAC Commission and DOD data.

Notes: Amounts may not total due to rounding.

aThe BRAC Commission reported its estimates in constant fiscal year 2005
dollars (i.e., does not include projected inflation). Also, OSD officials
told us they disagreed with the BRAC Commission's reported estimates for
18 recommendations and would increase one-time costs during BRAC
implementation by about $224 million and increase net annual recurring
savings after implementation by about $144 million to the BRAC
Commission's estimates shown in this table.

bDOD reported its BRAC estimates in the fiscal year 2008 BRAC budget
submission to Congress in current dollars (i.e., includes projected
inflation).

A comparison of the BRAC Commission's reported projections with DOD's data
shows that estimated implementation costs have increased by $10.1 billion
or 48 percent and estimated net annual recurring savings have decreased by
$212 million or 5 percent. However, another way to compare expected BRAC
costs and saving is by omitting the effects of inflation. We found that
using the same constant dollar basis as used by the BRAC
Commission--meaning inflation is not considered--DOD's estimated one-time
costs to implement BRAC increased to about $28.6 billion or 36 percent in
constant dollars and estimated net annual recurring savings decreased to
about $3.4 billion or 20 percent in constant dollars compared to the BRAC
Commission's reported estimates.

We found that estimated military construction costs accounted for about 64
percent of the increase in expected BRAC one-time costs. Specifically, the
BRAC Commission estimated that to implement the BRAC recommendations,
military construction costs would be about $13 billion, whereas DOD's
current estimates for military construction, without inflation, were about
$20 billion. We estimated that inflation accounted for about 25 percent,
or about $2.6 billion of the increase in expected one-time costs. This
mostly occurred because the BRAC Commission presented its estimates using
constant fiscal year 2005 dollars, which does not include the effects of
projected inflation, whereas DOD's budgeted estimates were presented in
current (inflated) dollars because budget requests take into consideration
projected inflation. Further, the BRAC Commission estimates did not
include projected environmental cleanup costs for BRAC-affected bases,
which is a consistent practice with past BRAC rounds because DOD is
required to perform needed environmental cleanup on its property whether a
base is closed, realigned, or remains open. Environmental cleanup added
about 6 percent, or about $590 million in expected costs. Finally, other
projected expenses such as operation and maintenance accounted for about 5
percent or about $500 million of the increase in expected costs. Because
the BRAC Commission's data do not include some specific budget categories
that are used in the DOD BRAC budget, we could not make direct comparisons
and precisely identify all estimated cost and savings changes.

  Estimated One-time Costs Have Increased

Our analysis shows that estimated one-time costs to implement 33 BRAC
recommendations, representing nearly 1/5 of all the BRAC recommendations
for this round, increased by more than $50 million each compared to the
BRAC Commission's estimates. (See app. II for a listing of these
recommendations.) DOD's expected costs to implement 6 of these
recommendations increased by a total of about $4 billion. Specifically, we
found about:

           o $970 million increase in the estimated costs of consolidating
           various leased locations and closing other locations of the
           National Geospatial-Intelligence Agency to Fort Belvoir, Virginia,
           largely because the agency identified the need for additional
           supporting facilities, such as a technology center and additional
           warehouse space, as well as increased costs for information
           technology and furnishings to outfit the new buildings. According
           to OSD's business plan, the COBRA analysis of specific costs and
           the number of personnel to realign were classified;
           o $700 million increase in the estimated costs of realigning
           Walter Reed Army Medical Center, D.C., and relocating medical care
           functions to the National Naval Medical Center, Bethesda,
           Maryland, and Fort Belvoir, Virginia, largely because planning
           officials identified the need for additional space and supporting
           facilities at the receiving installations that increased estimated
           military construction costs by almost $440 million. Most of these
           estimated cost increases are expected to occur at the National
           Naval Medical Center, Maryland, because of increased requirements
           to renovate existing facilities, such as the medical center.
           Additionally, several other facilities, such as a parking
           structure and a larger than-initially-expected addition to the
           medical center, increased the construction cost estimates as well;
           o $680 million increase in the estimated costs of relocating the
           Army's armor center and school from Fort Knox, Kentucky, to Fort
           Benning, Georgia, to support the creation of a new maneuver
           school, largely because the Army identified the need for about
           $400 million in construction of several facility projects, such as
           training ranges, instructional facilities, barracks, medical
           facilities, and a child development center that were not in the
           initial estimates. Also, the Army identified the need for about
           $280 million more in infrastructure support, such as water, sewer,
           and gas lines, as well as roads to support the new maneuver school
           at Fort Benning;
           o $680 million increase in the estimated costs of closing Fort
           Monmouth, New Jersey, largely because of increases in expected
           military construction costs, such as $375 million at Aberdeen
           Proving Ground, which is to receive many of the missions from the
           planned closure of Fort Monmouth and for additional facilities,
           such as a communications equipment building and an instructional
           auditorium. Also, the Army identified the need for additional
           infrastructure improvements at Aberdeen such as utilities, roads,
           and information technology upgrades. The Army determined that its
           military construction estimates would increase because the
           existing facilities at Aberdeen could not accommodate an increase
           in size of Fort Monmouth's Command, Control, Communications,
           Computers, Intelligence, Surveillance, and Reconnaissance mission
           as originally estimated. Moreover, military construction costs to
           relocate the U.S. Army Military Academy Preparatory School from
           Fort Monmouth to West Point, New York, increased about $175
           million largely because the scope of the facility construction
           increased from approximately 80,000 square feet to more than
           250,000 square feet and planning officials identified the need to
           spend about $40 million to prepare the site for construction,
           particularly for rock removal, given the terrain at West Point.
           Also, DOD's cost estimates for environmental cleanup at Fort
           Monmouth have increased by more than $60 million;
           o $600 million increase in the estimated costs of co-locating
           miscellaneous OSD, defense agency, and field activity-leased
           locations to Fort Belvoir and Fort Lee, Virginia, largely due to
           increases in military construction cost due to the identification
           of various required facilities at the receiving installations not
           included in the original estimate. For example, construction costs
           increased because it was determined a structured parking garage
           costing about $160 million would be needed to accommodate the
           increase in personnel with parking needs compared to the original
           nearly $3 million estimate for a flat surface parking lot. An
           additional estimated cost increase of nearly $50 million is needed
           to cover the costs for a heating and cooling plant and various
           safety and antiterrorism protection features. Estimated costs also
           increased by more than $160 million to implement this
           recommendation for increased information technology needs; and
           o $550 million increase in the estimated costs of establishing the
           San Antonio Regional Medical Center and realigning enlisted
           medical training to Fort Sam Houston, Texas, largely because
           planning officials identified additional requirements to move
           medical inpatient care functions from Wilford Hall Medical Center
           at Lackland Air Force Base, Texas to Fort Sam Houston, including
           operating rooms and laboratory facilities not included in the
           original estimate. Additionally, requirements for more
           instructional and laboratory space increased to accommodate an
           increase in the number of students expected to receive medical
           training at Fort Sam Houston. Based on the services conducting
           additional analysis and using other planning assumptions, the
           number of students now expected to arrive at Fort Sam Houston for
           medical enlisted training increased by more than 2,700 (44
           percent)--from about 6,270 students to approximately 9,000
           students.

           BRAC implementing officials told us that information gained from
           site visits, such as better information on the actual condition
           and availability of certain facilities, was a key factor as to why
           the department's estimates changed from the BRAC Commission's
           estimates. For example, DOD's estimated cost increased over
           earlier projections as a result of better data becoming available
           on the realignment of the Army Forces Command headquarters due to
           the closure of Fort McPherson, Georgia. These data showed the
           Command realigned to Fort Bragg and Pope Air Force Base, North
           Carolina would be located in over 20 different buildings. The Army
           decided, therefore, to preserve existing operational efficiencies
           by keeping the entire Command intact in one location, as it is now
           at Fort McPherson, by building a new facility at Fort Bragg
           although this plan led to the increase in expected costs to
           implement the recommendation.

           Moreover, data for some recommendations changed as certain
           requirements became better defined over time. For example,
           personnel requirements related to the recommendation to activate a
           brigade combat team and its associated headquarters unit at Fort
           Hood, Texas, and then relocate it to Fort Carson, Colorado, became
           better defined after the BRAC Commission made its estimates.
           During the BRAC decision-making process in 2005, the Army planned
           its facility requirement on about 3,200 soldiers per brigade
           combat team but subsequently increased the personnel requirement
           to 3,900 soldiers per brigade combat team as it budgeted for
           needed facilities in formulating the fiscal year 2008 BRAC budget
           submission. Likewise, the personnel requirement in providing
           facilities for an associated headquarters unit increased from 300
           soldiers in the initial analysis to 900, thus increasing the
           expected costs. Thus, the number of personnel to be accommodated
           at Fort Carson in order to implement this BRAC recommendation
           increased by 37 percent from what was initially expected, which in
           turn increased the size of the facilities necessary to house the
           additional soldiers expected to arrive at Fort Carson, leading to
           an increase in expected cost to implement this recommendation.

           As in all previous BRAC rounds, the BRAC Commission used DOD's
           COBRA model to generate its estimates. Both we and the BRAC
           Commission acknowledged in our respective BRAC 2005 reports that
           the COBRA model, while valuable as a comparative tool, does not
           provide estimates that DOD is expected to use in formulating the
           BRAC budget and against which Congress will appropriate funds. We
           have stated that COBRA does not necessarily reflect with a high
           degree of precision the actual costs or savings that are
           ultimately associated with BRAC implementation. We have also
           stated that the services are expected to refine COBRA estimates
           following the BRAC decision-making process to better reflect
           expected costs and savings using site-specific information. While
           COBRA estimates do not 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--and that the BRAC Commission's COBRA-generated estimates
           are the only reasonable baseline to use to identify BRAC cost and
           savings changes since the recommendations became effective.20
			  
			    Savings Estimates Have Decreased

           Our analysis shows that estimated net annual recurring savings to
           implement 13 BRAC recommendations decreased by more than $25
           million each compared to the BRAC Commission's estimates. (See
           app. III for a listing of these recommendations.) The BRAC
           Commission estimated that BRAC 2005 would result in net annual
           recurring savings of $4.2 billion beginning in fiscal year 2012;
           however, we calculated that the net annual recurring savings have
           decreased to $4 billion (5 percent).21 DOD attributed the decrease
           in its savings estimate primarily to changes in initial
           assumptions or plans. We identified several BRAC recommendations
           for which savings estimates decreased compared to the BRAC
           Commission's estimates. Specifically, we found about:

           o $90 million decrease in the estimated savings of closing various
           leased locations of the National Geospatial-Intelligence Agency
           and realigning other locations to Fort Belvoir, Virginia.
           Initially, officials at the National Geospatial-Intelligence
           Agency and the OSD BRAC Office explained that fewer personnel
           eliminations caused some of the decrease in savings. Additionally,
           the day before we released this draft for comment, an OSD BRAC
           Office official explained to us that they underreported the
           estimated savings from expected lease terminations in the fiscal
           year 2008 BRAC budget submission. However, time did not permit us
           to analyze this information.
           o $80 million decrease in the estimated savings of closing three
           chemical demilitarization depots (Deseret Chemical Depot, Utah;
           Newport Chemical Depot, Indiana; and Umatilla Chemical Depot,
           Oregon), largely because the Army expects not to close these
           facilities within the BRAC statutory implementation time frame
           because DOD must complete the chemical demilitarization mission to
           comply with treaty obligations before these facilities can close,
           which resulted in less expected savings;
           o $70 million decrease in the estimated savings of establishing
           joint bases at multiple locations, largely because the Army did
           not include its share of the expected savings due to unresolved
           issues concerning joint base operations, whereas the other
           services included the COBRA-generated savings in DOD's BRAC budget
           submission to Congress. OSD had not approved the business plan for
           this recommendation; thus additional information on expected
           savings was not available for us to review; and
           o $50 million savings decrease in realigning the Defense Logistics
           Agency's supply, storage, and distribution network, largely
           because of the need to retain higher inventory levels than
           anticipated and less personnel elimination.

20 In DOD's initial BRAC fiscal year 2007 budget submission to Congress in
March 2006, the department stated that it did not have enough time to
formulate a reasonable BRAC budget and that the budget submission
contained significant funding shortfalls. Based on our analysis of DOD's
initial BRAC budget submission, we agreed and believed it would have been
inappropriate for us to use the data in our analysis.

21 Estimates for net annual recurring savings are based on DOD's annual
recurring costs and savings expected in 2012, the year after DOD expects
to complete BRAC implementation. OSD BRAC officials told us they expect
2012 to be the first year to accrue the full amount of net annual
recurring savings because some recommendations are not expected to be
completed until late 2011. Based on data OSD provided us, DOD expects to
generate about $400 million more in annual recurring savings using its
2012 data, which we have included in our analysis, compared to the data
provided in the department's fiscal year 2008 BRAC budget submission to
Congress.

           DOD Will Take Longer to Recoup Up-Front Costs Than the BRAC Commission
			  Expected

           DOD's current estimates to implement the BRAC recommendations show
           that it will take until 2017 for the department to recoup its
           up-front costs--4 years longer than the BRAC Commission's
           estimates indicated it would take for DOD's up-front investments
           to begin to pay back.22 Historically, it has taken DOD about 6 1/2
           years to recoup up-front costs for actions such as constructing
           new facilities, providing civilian severance pay, or moving
           personnel and equipment as a result of implementing BRAC
           recommendations. Our analysis of the BRAC Commission's estimates
           shows that the time required to recoup such costs would be 8
           years, or in 2013. However, using DOD's current estimates, our
           analysis shows that the time required to recoup costs would be 12
           years, or in 2017, as shown in figure 3.
			  
22 Payback period is a metric used by DOD and the BRAC Commission in
evaluating individual BRAC recommendations and represents the time
required to recoup up-front investment costs to implement BRAC
recommendations. Thus, payback or the break-even point is when cumulative
savings exceed cumulative costs.

Figure 3: Comparison of Time to Recoup BRAC Costs Using BRAC Commission
and DOD's Data

Similarly, because DOD expects to spend more and save less compared to the
BRAC Commission's estimates, projected 20-year savings have decreased by
more than half.23 The BRAC Commission estimated that the implementation of
this BRAC round would save about $36 billion over a 20-year period ending
in 2025. However, based on our analysis of DOD's current estimates,
implementation of this BRAC round will save about $15 billion, a decrease
of $21 billion (58 percent), in fiscal year 2005 constant dollars. OSD
BRAC officials told us that, although the 20-year savings estimate is less
than the BRAC Commission expected, the department expects the
implementation of this BRAC round to produce capabilities that will
enhance defense operations and management, despite less than anticipated
savings.

Moreover, DOD expects a majority of the expected costs and savings to be
related to the implementation of a small percentage of the BRAC
recommendations. For example, we determined that DOD expects the
implementation of about 13 percent of the recommendations to incur 65
percent of the expected one-time costs (see app. IV); 15 percent of the
recommendations to generate 85 percent of the expected annual recurring
savings (see app. V); and 16 percent of the recommendations to generate 85
percent of the expected 20-year savings (see app. VI).

DOD's Estimates to Implement BRAC Recommendations Will Likely Continue to
Evolve, and Savings Estimates May be Overstated

Based on our analysis, we believe DOD's cost and savings estimates to
implement the BRAC 2005 recommendations are likely to continue to evolve
in future BRAC budget submissions. First, DOD's estimates for some key
recommendations are uncertain because they are based on implementation
details that are still evolving, especially for some complex
recommendations such as establishing 12 new joint bases. Second, military
construction costs could increase due to various economic factors and a
possible readjustment of Army construction costs. Third, environmental
cleanup costs for BRAC implementation are preliminary and are likely to
increase. Furthermore, we believe that DOD's annual recurring savings
estimates may be overstated, largely because 46 percent of this savings is
due to questionable military personnel savings.

23 Twenty-year savings, also known as 20-year net present value in the
BRAC Commission's report, is a financial calculation that accounted for
the time value of money by determining the present value of future savings
minus up-front investment costs over a specified period of time.
Determining net present value is important because it illustrates both the
up-front investment costs and long-term savings in a single amount. In the
context of BRAC implementation, net present value is calculated for a
20-year period from 2006 through 2025.

Details for Several Key Recommendations Are Uncertain and Estimates Are Likely
to Change

Many details involved in the implementation of several key BRAC
recommendations were uncertain when the department submitted its fiscal
year 2008 BRAC budget submission to Congress in February 2007; thus, these
estimates are likely to continue to change in succeeding BRAC budget
submissions. OSD officials told us that some estimates could change as
implementation planning progresses and that initial planning for many
recommendations was very difficult but they wanted to provide Congress
with the best budget data available at the time of the budget submission.
However, until DOD resolves implementation details surrounding its BRAC
recommendations, it will continue to have difficulty in more precisely
estimating costs and savings and the resolution of these details could
cause the department's cost and savings estimates to change. For example:

           o Realigning Walter Reed Army Medical Center, Washington, D.C.
           Multiple groups reviewed current and future medical care for
           wounded soldiers, and DOD officials told us that cost estimates in
           DOD's next BRAC budget submission to Congress could change pending
           the outcomes of these various review groups. OSD officials told us
           implementation costs will likely increase from the reported $1.7
           billion estimate if the time frame to complete the recommendation
           is accelerated, as recommended by OSD's independent panel to
           review current rehabilitative care at Walter Reed.24 
           o Co-locating miscellaneous OSD, defense agency, and field
           activity leased locations to Fort Belvoir, Virginia. The Army had
           planned to relocate these agencies and activities to Fort
           Belvoir's Engineering Proving Ground, but in August 2007 the Army
           announced it is considering a nearby location currently belonging
           to the U.S. General Services Administration in Springfield,
           Virginia. Then, in October 2007, the Army announced it is also
           considering another site in Northern Virginia for relocating about
           6,000 personnel. The reported cost estimate of $1.2 billion to
           implement this recommendation is likely to change depending on the
           Army's site location for relocating these OSD offices, defense
           agencies, and defense field activities.
           o Establishing Army Centers of Excellence at several locations.
           The Army was not certain about the number of personnel it expected
           to eliminate as a result of combining several Army schools and
           centers at the time of the fiscal year 2008 BRAC budget submission
           to Congress.25 Based on our analysis, once the Army resolves the
           implementation details for these recommendations, the combined net
           annual savings estimate of $332 million is likely to change in the
           next BRAC budget submission.
           o Realigning Fort Bragg, North Carolina. The decision as to where
           to relocate on Eglin Air Force Base, Florida, the Army's 7th
           Special Forces Group currently located at Fort Bragg remained
           uncertain as of August 2007. According to officials at Eglin, the
           planned location of the Special Forces Group could change because
           of various space and noise issues associated with the
           installation's implementation of another BRAC recommendation to
           establish a joint training site for the Joint Strike Fighter
           aircraft, also at Eglin Air Force Base. DOD's estimated $343
           million in cost in its fiscal year 2008 BRAC budget submission to
           Congress would change depending on the final site location for the
           7th Special Forces Group at Eglin.
           o Establishing joint basing at multiple locations. The services
           have yet to agree on many of the details involved with this
           recommendation to create 12 joint bases. According to BRAC
           implementing officials and recent testimony before Congress, it is
           still uncertain what the organizational and personnel requirements
           will be for these joint bases, thus making it difficult to provide
           a realistic estimate on the costs or savings from implementing
           this recommendation. DOD is currently estimating net savings of
           $116 million annually.
           o Realigning medical enlisted training at Fort Sam Houston, Texas.
           Part of this recommendation required the services to co-locate
           their medical training to one location with the potential of
           transitioning to a joint training effort. Fort Sam Houston
           officials told us that the expected savings from this
           recommendation were anticipated based on a joint training effort.
           However, BRAC implementing officials told us the services had not
           yet agreed on the final joint curriculum when the fiscal year 2008
           BRAC budget submission was provided to Congress; thus the number
           of instructors needed and several other details remained
           uncertain. These officials told us that once these details become
           final, the amount of expected net savings, which DOD estimated to
           be about $91 million annually, could change for this
           recommendation.
           o Creating a Naval Integrated Weapons and Armaments Research,
           Development and Acquisition, Test and Evaluation Center mostly at
           Naval Air Weapons Station China Lake, California. Navy officials
           told us they were uncertain how many personnel associated with a
           testing range mission will realign as they plan for the
           implementation of this recommendation. Moreover, the DOD Inspector
           General recently reported that the Navy did not adequately
           document the number of personnel expected to realign in this
           recommendation's proposed business plan, citing that the number of
           personnel to move has ranged from about 1,660 to nearly 650.26
           Until OSD resolves implementation details surrounding this
           recommendation, it will continue to have difficulty in more
           precisely estimating the associated costs and savings. DOD
           estimated it will cost about $427 million to implement this
           recommendation as presented in the fiscal year 2008 BRAC budget
           submission and OSD estimated it will accrue a net recurring
           savings of $68 million annually after 2011.
           o Co-locating medical command headquarters. Various BRAC
           implementing officials associated with planning the implementation
           for this recommendation told us that depending on the still
           undecided final site location and the number of personnel to
           relocate, the $50 million in estimated costs to implement this
           recommendation could likely change.

24 Report by the Independent Review Group on Rehabilitative Care and
Administrative Processes at Walter Reed Army Medical Center and the
National Naval Medical Center, April 2007.

25 Combining several existing schools and centers is associated with three
BRAC recommendations. These Army recommendations are (1) realign the Armor
School at Fort Knox, Kentucky, with the Infantry School at Fort Benning,
Georgia, to create the new Maneuver Training Center; (2) realign various
combat service support functions from various installations to Fort Lee,
Virginia, to establish a combined Combat Service Support Center; and (3)
realign the Air Defense Artillery School from Fort Bliss, Texas, to Fort
Sill, Oklahoma, to form the new Net Fires Center.

           These recommendations illustrate the evolving nature of
           implementation planning and the likelihood that the associated
           cost and savings estimates could likely change. They are not the
           only recommendations which may experience changes in costs or
           savings; however, they are some of the recommendations from which
           DOD expects to incur the most costs and savings relative to other
           BRAC 2005 recommendations. Thus, changes to cost and savings
           estimates related to these recommendations will have a larger
           effect on the overall BRAC implementation estimates.
			  
			  Military Construction Costs Could Increase

           Military construction costs could increase due to various economic
           pressures and if the Army's new initiatives designed to reduce
           construction costs do not achieve the planned results. DOD's
           current cost estimates of $31 billion to implement the BRAC
           recommendations involve about $21 billion in estimated costs for
           military construction that could likely increase because of
           greater than expected inflation and the market demand for new
           construction. Since the majority of expected BRAC costs are for
           military construction, systemic increases in the cost of
           construction could have a considerable effect on the total cost to
           implement BRAC 2005. This change is important because DOD's
           estimate of $21 billion in military construction is the single
           largest cost item associated with implementing BRAC 2005
           recommendations and is unprecedented given that DOD spent less
           than $7 billion for military construction in the four previous
           BRAC rounds combined. In addition, we recognize that determining
           costs in construction programs that span years of effort is
           difficult. As such, DOD told us they will continue to monitor
           reasons for potential cost growth for BRAC construction contracts.
			  
26 DOD Inspector General, Navy's Proposed Business Plan for Base
Realignment and Closure 2005 Recommendation 184, D-2007-127 (Arlington,
Va.: Sept. 25, 2007).

           Additionally, BRAC implementing officials expressed concern that
           construction costs have the potential to increase in areas already
           experiencing high commercial construction demands such as the
           National Capital Region, Washington, D.C. and San Antonio, Texas.
           For example, DOD estimated it could cost about $3.4 billion in
           construction to implement several recommendations in the National
           Capital Region, Washington, D.C. (the realignment of Walter Reed
           Medical Center, the relocation of the National
           Geospatial-Intelligence Agency, and the realignment to Fort
           Belvoir due to numerous terminations of DOD-leased space in the
           Washington, D.C. area). Moreover, DOD estimated it could cost
           about $1.3 billion in construction to implement the recommendation
           to establish a new joint medical enlisted training center and
           relocate Lackland Air Force Base's medical inpatient care to Fort
           Sam Houston, San Antonio, Texas. U.S. Army Corps of Engineers
           (USACE) officials told us they are concerned about what effect
           construction demand might have on bid proposals given the sizable
           amount of construction to take place in a limited amount of time
           to meet the BRAC statutory completion time frame. Additionally,
           service officials at various installations expressed concern about
           the potential for increases in construction costs because of
           ongoing reconstruction due to damage caused by Hurricane Katrina,
           coupled with the large volume of anticipated BRAC construction
           that could also affect bid proposals.

           Similar to the current commercial construction market in general,
           military construction has been affected by rising costs for
           construction labor and materials for the last several years. USACE
           officials told us the actual rate of construction inflation for
           the last several years has exceeded the federal government's
           inflation rate used for budgetary purposes, which is required to
           be used in budgeting for construction projects. While this
           difference was as high as 6.1 percentage points in 2004, the
           difference between the actual rate of construction inflation and
           the government's budgetary inflation rate has diminished recently.
           USACE officials told us that if the extent to which the actual
           rate of inflation continues to exceed the budgeted rate as
           implementation proceeds, and if construction material costs are
           higher than anticipated, they would either have to redirect
           funding from other sources to provide for construction projects or
           resort to a reduction in the scope of some construction projects.
           However, this trend may not necessarily continue into the future
           depending on the economics surrounding the construction industry.

           USACE is currently transforming and streamlining its process for
           managing and contracting for military construction. USACE
           officials told us that these transformation efforts could help in
           meeting Army's expected large volume of military construction as
           well as costs associated with BRAC and other force structure
           initiatives such as overseas rebasing and Army modularity. USACE
           has developed a strategy intended to reduce construction costs by
           15 percent and reduce construction time by 30 percent. Through its
           transformation strategy, USACE intends to change how it executes
           construction projects by

           o standardizing facility designs and processes,
           o expanding the use of premanufactured building where sections or
           modules of a building are constructed and transported to a
           construction site to be assembled,
           o executing military construction as a continuous building program
           rather than a collection of individual construction projects, and
           o emphasizing commercial rather that government building
           standards, which would allow contractors greater flexibility to
           use a wider variety of construction materials to meet construction
           requirements.

           The Army has already incorporated a 15 percent reduction into its
           BRAC construction estimates and has budgeted accordingly. Although
           USACE officials expressed optimism that these cost savings will be
           realized, and preliminary results are encouraging, these results
           are based on recent, limited experience using this new process.
           Specifically, USACE initiated five construction pilots in 2006,
           all of which were awarded under its price limit. However, if the
           cost of construction materials escalates or if there is a shortage
           of construction labor, especially in locations of high
           construction volume such as Washington, D.C, and San Antonio,
           Texas, USACE told us that some of the expected military
           construction transformation savings could decrease. Given that the
           Army is expected to incur almost 60 percent of the estimated BRAC
           construction costs ($12 billion), the impact on overall BRAC costs
           if the Army is unable to achieve its projected 15 percent savings
           could be considerable, especially since USACE officials told us
           the majority of the Army's BRAC-related construction projects
           incorporated the 15 percent reduction into their estimates.
			  
			  Environmental Cleanup Costs Are Preliminary and Likely to Increase

           We reported in January 2007 that DOD's available data showed that
           at least $950 million will be needed to complete environmental
           cleanups underway for known hazards on the military bases
           scheduled for closure as a result of the BRAC 2005 round.27 Our
           prior work has shown that some closures result in more intensive
           environmental investigations and the uncovering of additional
           hazardous contaminations, thus resulting in higher cleanup costs
           than DOD predicted and budgeted. For example, additional hazardous
           contaminations were found at the former McClellan Air Force Base,
           California, which was recommended for closure in 1995. The
           discovery of traces of plutonium during a routine cleanup in 2000
           caused cleanup costs to increase by $21 million. However, as
           certain bases undergo more complete and in-depth environmental
           assessments, a clearer picture of environmental cleanup costs will
           likely emerge.
			  
			  Annual Recurring Savings Estimates May be Overstated

           DOD's estimated annual recurring savings resulting from base
           closures and realignments may be overstated by about 46 percent.
           Currently, DOD calculates total estimated annual recurring savings
           of about $4 billion. This amount includes $2.17 billion in
           eliminated overhead expenses such as the costs no longer needed to
           operate and maintain closed or realigned bases and reductions in
           civilian salaries, which will free up funds that DOD can then use
           for other defense priorities. However, DOD's annual recurring
           savings estimate also includes $1.85 billion in military personnel
           entitlements--such as salaries and housing allowances--for
           military personnel DOD plans to shift to other positions but does
           not plan to eliminate. While DOD disagrees with us, we do not
           believe that transferring personnel to other locations produces
           tangible dollar savings outside the military personnel accounts
           that DOD can use to fund other defense priorities since these
           personnel will continue to receive salaries and benefits.

           We recognize that DOD is trying to transform its infrastructure
           and the Secretary of Defense's primary goal for the BRAC 2005
           process was military transformation. We also recognize DOD's
           position that military personnel reductions allow the department
           to reapply these personnel to support new capabilities and improve
           operational efficiencies. Nonetheless, DOD's inclusion of military
           personnel entitlements in its estimates of annual recurring
           savings could generate a false sense that all of its reported
           savings would generate funds that DOD could apply elsewhere.
           Because DOD's BRAC budget submission to Congress does not explain
           the difference between recurring savings attributable to military
           personnel entitlements and recurring savings that will make funds
           available for other defense priorities, DOD's overall estimated
           annual recurring savings appear almost twice as large as those
           which will actually be realized. In addition, our analysis shows
           that the current percentage of estimated annual recurring savings
           from military personnel entitlements (46 percent) is considerably
           higher compared to the last round of BRAC that took place in 1995,
           in which DOD derived about 5 percent of BRAC annual recurring
           savings from military personnel entitlements. During the previous
           four rounds of BRAC that took place between 1988 and 1995, the
           military was downsizing in personnel strength, yet the average
           percentage of annual recurring savings DOD derived from military
           personnel entitlements was 26 percent.
			  
27 GAO, Military Base Closures: Opportunities Exist to Improve
Environmental Cleanup Cost Reporting and Expedite Transfer of Unneeded
Property, [35]GAO-07-177 (Washington, D.C.: Jan. 30, 2007).

           We reported in July 2005 that military personnel position
           eliminations are not a true source of savings since DOD intends to
           reassign or shift personnel to other positions without reducing
           military end strength associated with the corresponding BRAC
           recommendation. Moreover, the BRAC Commission stated in its
           September 2005 report that DOD's inclusion of savings from
           eliminating military personnel positions distorts the actual
           savings attributable to BRAC recommendations. The service
           officials we interviewed could not link actual military personnel
           eliminations directly to implementing a BRAC recommendation, as
           illustrated in the following:

           o Army officials said its military end strength will not be
           reduced due to any BRAC recommendations. In fact, the Army plans
           to increase its active-duty end strength by 65,000 over the next
           several years.
           o Navy officials said they anticipate reducing the Navy's end
           strength by 26,000 active duty military personnel between fiscal
           years 2006 and 2011. However, they told us they have not linked
           any of these anticipated reductions to BRAC recommendations.
           o Air Force officials said they are in the process of reducing the
           service's active-duty end strength by about 40,000. However, Air
           Force officials said that they cannot link any reductions in
           military end strength to implementing their BRAC recommendations
           and the personnel drawdown is independent of BRAC.

           DOD policy and Office of Management and Budget's guidance28
           require that an economic analysis be explicit about the underlying
           assumptions used to estimate future costs and benefits, which we
           believe includes estimating BRAC savings. If the savings we
           question were omitted from DOD's savings estimates, net annual
           recurring savings would decrease by about 46 percent. As a result,
           DOD's BRAC budget submission does not provide enough information
           to allow Congress full oversight of the savings that can be
           applied to other programs outside of the military personnel
           account. Greater transparency over the assumptions behind DOD's
           BRAC savings estimates would help to promote independent analysis
           and review and facilitate congressional decision making related to
           the multibillion-dollar BRAC implementation program.

           In addition to taking issue with how DOD characterizes military
           personnel savings, we also disagree with DOD claiming savings for
           closing a base that is actually going to stay open. At the time of
           DOD's fiscal year 2008 BRAC budget submission to Congress, DOD
           claimed about $260 million in annual recurring savings for closing
           Cannon Air Force Base, New Mexico, which is now going to remain
           open. Although DOD recommended closing Cannon in May 2005 as a
           proposed recommendation, the BRAC Commission modified the proposed
           closure, and stated in its September 2005 report to the President
           that Cannon could remain open if the Secretary of Defense
           identified a new mission for the base and relocated the base's
           fighter wing elsewhere.29 Subsequently, the Air Force announced in
           June 2006 that Cannon would remain open and the 16th Special
           Operations Wing, currently located at Hurlburt Field, Florida,
           would relocate to Cannon. Nevertheless, DOD still claimed about
           $200 million in annual savings for military personnel entitlements
           and about $60 million in annual savings for categories such as
           base operation and maintenance in its fiscal year 2008 BRAC
           budget. Officials at the Air Force BRAC office told us that they
           claimed these annual savings because they disestablished the
           fighter wing at Cannon, although they said most of the military
           personnel and aircraft associated with the disestablished fighter
           wing were reassigned or relocated and will continue to operate.30
			  
28 DOD Instruction 7041.3, Economic Analysis for Decisionmaking (Nov. 7,
1995) and Office of Management and Budget, Circular No. A-94, Guidelines
and Discount Rates for Benefit-Cost Analysis of Federal Programs (Oct. 29,
1992).

29 Although the BRAC Commission language refers to Cannon Air Force Base
as a realignment, this is in reference to establishing an enclave at
Cannon that could remain open until December 31, 2009, during which time
the Secretary of Defense could seek other newly identified missions for
possible assignment to Cannon.

30 In commenting on a draft of this report, the Air Force BRAC Office said
they claimed these savings because the decision to reallocate Air Force
resources and mission to Cannon was made after the BRAC recommendation was
approved and was therefore, a non-BRAC programmatic decision.

           Furthermore, we have taken issue with estimated savings for
           several Air National Guard BRAC recommendations. As we reported in
           May 2007, the implementation of several Air National Guard
           recommendations is expected to result in annual recurring costs of
           $53 million rather than the annual recurring savings of $26
           million estimated by the BRAC Commission--a $79 million per year
           difference that occurred primarily due to language in the BRAC
           Commission's report that prevents the Air National Guard from
           reducing its current end strength in some states.31
			  
DOD Has Made Progress Implementing BRAC, but Several Challenges Increase Risk
That All Recommendations Might Not be Completed by the Statutory Deadline

           DOD has made progress implementing BRAC 2005, but faces a number
           of synchronization and coordination challenges related to
           implementing many BRAC recommendations. These challenges increase
           DOD's risk of not meeting the September 2011 statutory deadline.
           For example, personnel movements involving tens of thousands of
           personnel must be synchronized with the expenditure of billions of
           dollars to construct or renovate facilities needed to support them
           by 2011. The time frames for completing many BRAC recommendations
           are so closely sequenced and scheduled to be completed in 2011
           that any significant changes in personnel movement schedules or
           construction delays could jeopardize timely completion. Also, some
           recommendations are dependent on the completion of others, and
           delays in completing some interrelated actions might cause a
           domino effect that could jeopardize DOD's ability to meet the
           statutory 2011 BRAC deadline. BRAC 2005, unlike prior BRAC rounds,
           included more joint recommendations involving more than one
           military component, thus creating challenges in achieving unity of
           effort among the services and defense agencies.
			  
31 GAO, Military Base Closures: Management Strategy Needed to Mitigate
Challenges and Improve Communication to Help Ensure Timely Implementation
of Air National Guard Recommendations, [36]GAO-07-641 (Washington, D.C.:
May 16, 2007).

           DOD Has Made Progress Implementing BRAC

           DOD's implementation of BRAC 2005 has progressed since the
           recommendations became effective in November 2005. For example,
           Navy officials reported that they completed implementing 14 BRAC
           actions32 involving the closure of Navy reserve centers and
           recruiting districts. To dedicate resources and facilitate
           communications to plan for the implementation of hundreds of BRAC
           actions, the military services and affected defense agencies have
           their own BRAC program management offices. Over the past 2 years,
           these offices have begun the planning and design for the $21
           billion military construction program necessitated by the most
           recent BRAC round, including initiating site surveys and
           environmental assessments needed before military construction
           projects can begin.

           OSD realized that the complexity of the BRAC 2005 round required
           it to strategically manage and oversee the entire BRAC 2005
           program. During prior BRAC rounds, OSD's oversight of BRAC
           implementation was typically limited to adjudicating disagreements
           among the services over implementation issues, according to OSD
           BRAC officials. However, for this BRAC round, the Principal Deputy
           Under Secretary of Defense for Acquisition, Technology and
           Logistics stated in 2005 that the large number of transformational
           recommendations, particularly recommendations to promote joint
           facility operations, would present OSD with significant
           implementation challenges. To meet these challenges, the
           department initiated a process to develop business plans that laid
           out the requisite actions, timing of those actions, and the costs
           and savings associated with implementing each recommendation.
           Additionally, OSD recognized that the development of business
           plans would serve as the foundation for the complex program
           management necessary to implement the BRAC 2005 recommendations.
           As such, the primary implementation activity of the military
           services, and defense agencies has been to develop about 240
           business plans for OSD review and approval. According to OSD,
           these business plans have been used as the primary vehicle to
           delineate resource requirements and generate military construction
           requirements.
			  
32 In the context of BRAC, actions are activities necessary to implement
final and approved recommendations of the BRAC Commission to close or
realign military installations.

           As of October 2007, OSD has approved about 220 business plans.
           Some business plans remain in draft and have not been approved for
           various reasons. According to OSD, these business plans involve
           complex issues associated with the services' lines of authority
           and sizeable personnel realignments that OSD BRAC officials told
           us they intend to resolve soon. However, OSD has deferred the
           approval of about 15 business plans pending the development of
           broader policies to facilitate the implementation of the
           recommendations associated with joint basing and chemical
           demilitarization. Finally, officials in OSD's BRAC Office told us
           they plan to continue reviewing business plans as part of their
           comprehensive, centrally managed oversight of the BRAC program.
           Recognizing that business plans provide important implementation
           details, in June 2007 OSD directed the services and defense
           agencies to update these business plans twice a year in
           conjunction with OSD program reviews.
			  
			  Challenges in Synchronizing Many BRAC Actions Could Hinder DOD's
			  Ability to Complete Recommendations within the Statutory Time Frame

           The department faces a number of challenges related to
           synchronizing the completion of many BRAC recommendations in order
           to meet the statutory 2011 time frame. For example, personnel
           movements involving tens of thousands of military and civilian
           personnel must be synchronized with billions of dollars worth of
           construction or renovation activities needed to ensure they have
           the necessary facilities to support them. Also, the implementation
           of some recommendations is dependent on the completion of other
           recommendations before facilities can be renovated for new uses,
           and some DOD installations are affected by more than six separate
           recommendations. Delays in synchronizing and completing these
           interrelated actions could cause a domino effect that might
           jeopardize DOD's ability to meet the statutory 2011 BRAC deadline.
           Also, synchronizing the implementation of several force structure
           initiatives could further complicate DOD's BRAC implementation
           efforts.
			  
			    DOD Must Synchronize Personnel Movements with Construction Time Frames

           Implementation challenges primarily stem from the complexity of
           synchronizing the realignment of over 123,000 personnel with the
           completion of over $21 billion in new construction or renovation
           projects. According to DOD officials, construction schedules are
           often the primary driver in setting BRAC implementation timelines
           due to the amount of time needed to design and build new
           facilities or renovate existing facilities. The time frames for
           completing many BRAC recommendations are closely sequenced and
           scheduled to be completed in 2011 but any significant changes in
           personnel movement schedules or construction delays could
           jeopardize DOD's ability to meet the statutory 2011 BRAC deadline.

           According to OSD's approved business plans and DOD officials, the
           following are some BRAC recommendations that could experience
           synchronization challenges:

           o Realigning Army reserve components, constructing 125 new Armed
           Forces Reserve Centers, and closing 387 existing reserve component
           facilities: Army reserve component officials told us they are
           managing the construction of new Armed Forces Reserve Centers in a
           compressed time frame. The data in our recently issued report show
           that 26 percent of the BRAC actions implementing these
           recommendations will begin in fiscal year 2010, according to the
           approved business plans.33 This approach compresses the amount of
           time available to construct the facilities and respond to any
           construction delays that might arise, which increases the risk
           that the projects might not be completed in time to meet the BRAC
           statutory completion deadline. On the other hand, Army officials
           told us that they would assume less risk because many of these
           projects are small and can be completed within shorter time frames
           compared to larger projects. For example, the Army considered
           starting construction on the Armed Forces Reserve Centers toward
           the beginning of the implementation period and closing older
           reserve facilities. Instead, more complex and costly
           recommendations became a higher priority and reserve center
           actions were delayed.
           o Co-locating miscellaneous OSD, defense agency, and field
           activity leased locations at Fort Belvoir, Virginia: OSD officials
           told us that these activities have scheduled the arrival of over
           6,000 personnel by September 1, 2011--2 weeks before the BRAC
           statutory deadline--to implement over 30 discrete actions
           associated with this recommendation. In addition, recent
           developments could affect the timing of this realignment to Fort
           Belvoir because, at the time of our review, the Army was revising
           its implementation planning to accommodate the possibility of
           using nearby land owned by the U.S. General Services
           Administration or another location in Northern Virginia, which
           will require additional studies to determine environmental impacts
           and transportation requirements at the new location, according to
           Fort Belvoir officials. If the process of identifying alternative
           site locations results in delaying the movement of miscellaneous
           OSD offices, defense agencies, and field offices, this could
           jeopardize meeting the statutory deadline.
           o Realigning the National Geospatial-Intelligence Agency to Fort
           Belvoir, Virginia: The fiscal year 2008 BRAC budget submission
           shows that construction is expected to be completed by June 2011,
           which allows 3 months before the statutory deadline to move its
           missions. To mitigate mission impact and the risk of not
           completing these moves if construction is delayed, the agency
           plans to begin moving its personnel in phases starting in April
           2010.
           o Realigning Walter Reed Army Medical Center, Washington, D.C., to
           the National Naval Medical Center, Maryland, and Fort Belvoir,
           Virginia: Completion is scheduled by September 2011 according to
           the business plan. The medical joint cross-service group that
           developed this recommendation in 2005 stated that delays in
           constructing and occupying the buildings could risk the timely
           completion of this recommendation and concluded that aggressive
           actions would be needed to meet the 6-year deadline. Army and OSD
           officials testified before Congress in January 2007 that the time
           frame was "very tight" for completing this recommendation.34 Also,
           in response to various concerns about the quality of care for
           warfighters at Walter Reed, an official with the Army's Surgeon's
           General Office told us in September 2007 that certain parts of the
           recommendation supporting the construction of intensive medical
           care facilities are expected to be completed sooner than
           originally planned, while the move to the National Naval Medical
           Center, Maryland, and Fort Belvoir, Virginia is still scheduled to
           be completed by September 2011. DOD's standard construction
           schedules for medical facilities indicate new hospitals, or
           additions and renovations to an existing hospital, generally take
           longer to complete compared to other facilities.

33 GAO, Military Base Realignments and Closures: Plan Needed to Monitor
Challenges for Completing More than 100 Armed Forces Reserve Centers,
[37]GAO-07-1040 (Washington, D.C.: Sept. 13, 2007).

             Some Recommendations Are Dependent on the Completion of Others

           In some cases, DOD's synchronization challenges are exacerbated
           when the completion of one recommendation is dependent on the
           completion of another. For example, the BRAC recommendation to
           close Fort Monmouth, New Jersey, involves relocating personnel
           from the Army's Communications-Electronics Life Cycle Management
           Command currently located at Monmouth to Aberdeen Proving Ground,
           Maryland. The new facilities at Aberdeen are expected to be
           renovated by February 2011. However, DOD cannot begin those
           renovations until the training activity currently occupying the
           Aberdeen facilities relocates to Fort Lee, Virginia, an action
           associated with the implementation of another BRAC recommendation.
           Consequently, the training activity cannot vacate the Aberdeen
           space until a new facility is built for them at Fort Lee sometime
           in 2009. This interdependence is shown in figure 4.
			  
34 House Appropriations Subcommittee on Defense hearing on Military
Medical Readiness and Related Issues, January 19, 2007.

Figure 4: Sequencing of Personnel Movement for Several Interdependent BRAC
Recommendations

Likewise, such interdependence could undermine the Navy's ability to
complete within the statutory deadline the recommendation to consolidate
various Navy-leased locations onto government-owned property. The business
plan that describes the actions and time frames for moving various
Navy-leased locations onto government-owned property stated that it will
begin renovating space for the move to Arlington, Virginia, in September
2008. However, the current occupant of the space--a component of the
Defense Information Systems Agency--is not scheduled to vacate the space
the Navy is to move into until June 2011 because the Defense Information
Systems Agency component needs to wait until it can move into newly
constructed space at Fort Meade, Maryland--an action associated with
another BRAC recommendation. Although both DOD components are working on a
solution, the business plans for these two recommendations stated several
options in order to meet the 2011 BRAC deadline, such as having the Navy
occupy "portable facilities," build a new facility, or explore other
workarounds to meet the statutory time frame.

  Some Installations Affected by Multiple Recommendations

Another factor that could threaten the timely completion of some of the
BRAC recommendations is the number of DOD installations that are affected
by more than one recommendation. Based on BRAC Commission data, 27
installations are affected by six or more BRAC recommendations that
include installations such as Fort Belvoir, Virginia; Fort Sam Houston,
Texas; Lackland Air Force Base, Texas; Wright-Patterson Air Force Base,
Ohio; Naval Station Norfolk, Virginia; Aberdeen Proving Ground, Maryland;
and Redstone Arsenal, Alabama. In addition to their routine duties for
facility management, installation officials are responsible for
synchronizing and coordinating the movements of personnel with the
availability of facilities. The following are examples of installations
affected by multiple recommendations:

           o Fort Belvoir, Virginia: Officials responsible for implementing
           the BRAC actions associated with 14 separate recommendations told
           us that they need to synchronize the availability of various
           facilities to accommodate the increase of nearly 24,000 personnel
           expected to arrive, primarily as a result of BRAC recommendations
           resulting in the closure or realignment of numerous DOD agencies
           and activities. These officials said that they have concerns about
           meeting the overall time frame because their plans do not allow
           for any delays in construction projects or funding. Fort Belvoir
           officials told us they are encountering challenges when planning
           the synchronization of the large volume of construction and
           personnel movement throughout the implementation period. For
           example, the Army initially planned to site the implementation of
           2 recommendations (realigning the National Geospatial-Intelligence
           Agency and co-locating miscellaneous OSD, defense agency, and
           field activity leased locations) at Fort Belvoir that would have
           an unfavorable impact on the surrounding community due to
           increased traffic congestion. Though Fort Belvoir in October 2007
           announced new plans to obtain property near Fort Belvoir that
           might lessen traffic congestion for the move of miscellaneous OSD,
           defense agency, and field activity leased locations, Fort Belvoir
           officials told us that these plans could raise new implementation
           challenges to meet the statutory deadline because of additional
           time needed for environmental impact studies, planning and design
           of new construction, and demolition of existing structures at the
           new proposed site.
           o Fort Sam Houston, Texas: Installation officials at Fort Sam
           Houston told us that they have to synchronize numerous actions
           involving eight separate BRAC recommendations and have concerns
           about coordinating the availability of facilities--either to be
           constructed or renovated--with the planned net increase of over
           10,000 personnel. Furthermore, officials told us the lack of
           guidance on how installation officials will establish a joint base
           with nearby Lackland and Randolph Air Force Bases, Texas, in
           accordance with the BRAC recommendation on joint basing
           exacerbates the uncertainty in planning for the implementation of
           these recommendations.
			  
			    Force Structure Initiatives Further Complicate DOD's BRAC
				 Implementation Efforts

           Two Army force restructuring initiatives--modularity and overseas
           rebasing strategy--could exacerbate the Army's BRAC
           synchronization challenges. The Army considers modularity to be
           the most extensive reorganization of its force since World War II,
           in which it restructures itself from a division-based force to a
           more agile and responsive modular brigade-based force. According
           to Army estimates, this initiative will require a significant
           investment through fiscal year 2011. DOD's Global Defense Posture
           Realignment Plan, also known as overseas rebasing, will result in
           a global realignment of U.S. forces and installations, including
           the planned transfer to American territory of up to 70,000 defense
           personnel and about 100,000 family members and civilian employees
           currently living overseas. As a result of mostly these force
           structure initiatives and BRAC, the Army plans to relocate over
           150,000 soldiers and civilian personnel by fiscal year 2012,
           representing over 20 percent of the Army's total projected
           active-duty and civilian personnel end strength. To illustrate,
           Army installations that expect personnel increases of greater than
           5,000 over the next 5 years, as of March 2007, are shown in table
           2.

Table 2: Army Installations Expecting Net Gains of at Least 5,000
Personnel for Fiscal Years 2006 through 2011 Due to BRAC, Overseas
Rebasing, Modularity, and Other Miscellaneous Restationing Actions (as of
March 2007)

                                                               Estimated Army 
                                                   Percentage        military 
                    FY 2006  Estimated   Estimated         of    construction 
                  beginning    FY 2011 net gain in population     (dollars in 
Installation  population population  population   increase      thousands) 
Fort Belvoir,     21,437     45,332      23,895        111        $277,700 
VA                                                                         
Fort Bliss,       20,130     38,063      17,933         89       2,076,280 
TX                                                                         
Fort Bragg,       57,352     69,136      11,784         21       1,421,011 
NC                                                                         
Fort Lewis,       36,147     47,110      10,963         30       1,191,249 
WA                                                                         
Fort Sam          24,819     34,980      10,161         41         179,540 
Houston, TX                                                                
Fort Benning,     40,592     50,487       9,895         24       1,423,461 
GA                                                                         
Fort Riley,       15,188     24,608       9,420         62         905,570 
KS                                                                         
Fort Lee, VA      13,495     20,645       7,150         53         965,500 
Fort Meade,       35,504     41,915       6,411         18         104,900 
MD                                                                         
Fort Carson,      24,066     29,756       5,690         24         958,129 
CO                                                                         

Source: GAO analysis of Army headquarters-level data.

Notes: Personnel growth consists of Army military (active and reserve),
military students and trainees, civilians, non-Army military and
civilians, and mission contractors. Figures do not include family members
and nonmission-related contractors and expected increases that may occur
as a result of plans to increase the Army's active end strength by 65,000
personnel.

As shown in table 2, some installations are expecting substantial growth;
Forts Belvoir, Bliss, Riley, and Lee each anticipate net personnel gains
of more than 50 percent. For example, the Army plans to relocate at Fort
Bliss, Texas, about 18,000 personnel as part of BRAC, the transformation
of Army modular brigade units, and DOD's overseas rebasing efforts. The
Army is planning 54 new construction projects over the 6-year BRAC
implementation period to accommodate the increase in base population at
Fort Bliss. Also, some of the installations listed in table 2 may
experience more growth in the next several years depending on whether the
Army's active end strength is increased by 65,000 soldiers.

Coordination Among Multiple Services and Agencies Presents Additional Challenges

BRAC 2005, unlike prior BRAC rounds, included more joint recommendations
involving more than one military component, thus creating challenges in
achieving unity of effort among the services and defense agencies.
According to our analysis, 43 percent of the 240 OSD-required business
plans involved formal coordination between at least two services or
agencies. Service officials said that gaining consensus among military
services and defense agencies has been challenging in the areas of
personnel and facility requirements, implementation schedules, and funding
responsibilities. For example, officials told us it was a challenge due to
the joint nature in planning for the implementation of the recommendation
to realign Fort Bragg, North Carolina, by relocating Army's 7th Special
Forces Group to Eglin Air Force Base, Florida. Service officials told us
it took time for the Army and Air Force to coordinate how to share base
operations costs given these two services have different standards for
calculating these costs. Similarly, regarding the recommendation to
establish the Joint Strike Fighter initial joint training site at Eglin
Air Force Base, Florida, it took time for the Navy, Marine Corps, and Air
Force to agree on cost-sharing arrangements and a joint training
curriculum designed to achieve savings from consolidated training on the
aircraft. Likewise, other complex joint cross-service recommendations
could be slowed by a similar need to coordinate and negotiate agreements.
The following are some BRAC recommendations with unresolved coordination
challenges.

           o Create joint bases involving multiple defense installations: The
           26 defense installations involved with creating 12 new joint bases
           required DOD to define the governance structure over how these
           joint bases should be organized, the associated chain of command
           authority, and the operational concepts for managing these joint
           bases.35 According to service officials, some of their most
           challenging issues to resolve include 1) transferring real
           property and budget authority to the lead service, 2) determining
           standard levels of base operating support and which base functions
           to transfer to the lead service, 3) deciding whether civilian
           personnel on a joint base will become employees of the lead
           service, 4) agreeing on common terminology and standards, and 5)
           funding contributions from each service. These challenges to
           establishing joint bases have been problematic since each service
           has its own concept of how installations should be managed and
           organized. In particular, during recent congressional testimony,
           the Air Force expressed views on joint basing concepts contrary to
           those of OSD and the other services.36 To overcome these
           challenges, OSD formed a special working group to resolve these
           issues and OSD officials told us they would approve the joint
           basing business plan when more of the planning details have been
           resolved.

35 To establish joint bases, DOD plans to transfer various installation
management functions from bases that are contiguous or in close proximity
to each other to a designated lead military service. For example, OSD
plans to transform three bases--McGuire Air Force Base, Fort Dix, and
Naval Air Engineering Station Lakehurst-New Jersey--into one joint base
with the Air Force providing installation services.

36 Testimony before the House Appropriations Subcommittee on Military
Construction and Veterans Affairs in March 2007.

           o Realign supply, storage, and distribution management at multiple
           locations: There are several potential issues between the Defense
           Logistics Agency and the military services that may affect the
           planned implementation of the recommendation. While baseline
           agreements have been reached between the Defense Logistics Agency
           and the services on the transfer of supply-related personnel
           positions and related inventories to the Defense Logistics Agency,
           some important aspects of the implementation plans are incomplete
           and still need to be resolved. For example, performance-based
           agreements that will establish responsibilities, metrics to
           measure performance, costs, and business rules between the Defense
           Logistics Agency and the services have yet to be negotiated and
           agreed upon. Additionally, the funding and decision-making process
           for future maintenance, upgrades, usage, and integration of
           information technology systems transferring to Defense Logistics
           Agency has not been agreed to. Lastly, due to the way the Defense
           Logistics Agency plans to implement the recommendation by staging
           the personnel transfers over time by each military service, it
           plans to apply lessons learned to resolve issues as implementation
           proceeds. We also reviewed a separate BRAC action, which is part
           of this recommendation, in more detail and issued our report in
           October 2007.37 
           o Co-locate medical command headquarters: The affected agencies
           have had challenges in reaching agreement on where to co-locate
           these medical commands. Specifically, the Air Force and OSD Health
           Affairs have disagreed with the business manager on associated
           cost and implementation time frames. As such, OSD has not yet
           approved the business plan for this recommendation.

           As a result of these coordination challenges, the planning process
           has lengthened beyond that which DOD officials initially expected,
           which could result in delayed implementation of certain
           recommendations. The need for gaining consensus about planning and
           implementation details among the services and defense agencies
           could continue throughout the BRAC implementation period. At the
           same time, DOD believes the review process helps to ensure that
           BRAC actions meet the intent of the law, are accurate, and
           effectively coordinated. However, if gaining consensus among these
           entities continues to be a challenge or if new organizations
           established under BRAC continue to lack fully developed
           operational concepts and organizational structures, it may become
           increasingly difficult to implement these recommendations before
           the statutory 2011 deadline.
			  
37 GAO, Military Base Realignments and Closures: Transfer of Supply,
Storage, and Distribution Functions from Military Services to Defense
Logistics Agency, [40]GAO-08-121R (Washington, D.C.: Oct. 26, 2007).	

           Conclusion

           DOD recognizes that its BRAC recommendations and its
           implementation are of high public interest. As such, it is
           paramount that DOD communicates openly about the expected savings
           that could result from the implementation of BRAC actions. As long
           as DOD continues to assert that nearly half of its estimated $4
           billion in annual recurring BRAC savings come from military
           personnel reassignments, which will not free up funds for other
           defense priorities, DOD could create a false sense that BRAC 2005
           will result in a much higher dollar savings than will actually be
           realized to readily fund other priorities. Without explaining the
           difference between annual recurring savings attributable to
           military personnel reassignments and annual recurring savings that
           will make funds available for other defense priorities, DOD could
           lessen the credibility of the BRAC program and decrease the
           public's trust in the BRAC process. Greater transparency over the
           source of expected BRAC savings could help to preserve public
           confidence in the integrity of the BRAC program.
			  
			  Recommendation for Executive Action

           To provide more transparency over DOD's estimated annual recurring
           savings from BRAC implementation, we recommend that the Secretary
           of Defense direct the Under Secretary of Defense for Acquisition,
           Technology and Logistics, in consultation with the Office of the
           Under Secretary of Defense (Comptroller), to explain, in DOD's
           BRAC budget submission to Congress, the difference between annual
           recurring savings attributable to military personnel entitlements
           and annual recurring savings that will readily result in funds
           available for other defense priorities.
			  
			  Agency Comments and Our Evaluation

           In written comments on a draft of this report, DOD concurred with
           our recommendation and agreed to include an explanation of the
           annual recurring savings in its BRAC budget justification material
           that accompanies the annual President's budget. DOD also noted in
           its comments to us that military personnel reductions attributable
           to a BRAC recommendation as savings are as real as savings
           generated through end strength reductions. DOD also stated that
           while it may not reduce overall end strength, its reductions in
           military personnel for each recommendation at a specific location
           are real and these personnel reductions allow the department to
           reapply these military personnel to support new capabilities and
           improve operational efficiencies. While we recognize these
           benefits from reapplying freed up military personnel to other
           locations due to implementing BRAC recommendations, we do question
           that nearly half of DOD's annual recurring savings estimate of $4
           billion includes military personnel entitlements--such as salaries
           and housing allowances--for military personnel DOD plans to shift
           to other positions but does not plan to eliminate thus requiring
           DOD to continue paying the salaries and benefits. While DOD
           disagrees with us, we do not believe that shifting or transferring
           personnel to other locations produces tangible dollar savings
           outside the military personnel accounts that DOD can use to fund
           other defense priorities since these personnel will continue to
           receive salaries and benefits. DOD did acknowledge however, that
           these savings may not be available to fund other defense
           priorities because they have already been spent to fund military
           personnel priorities. It is also worth noting that DOD commented
           that although its net annual recurring savings estimates have
           decreased from $4.2 billion to $4 billion, these savings still
           represent a significant benefit that will result from the
           implementation of BRAC recommendations. DOD's written comments are
           reprinted in appendix VII. DOD also provided technical comments,
           which we have incorporated into this report as appropriate.

           We are sending copies of this report to interested congressional
           committees; the Secretaries of Defense; the Secretaries of the
           Army, Navy, and Air Force; Commandant of the Marine Corps; and the
           Director, Office of Management and Budget. 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
           [38]http://www.gao.gov .

           If you or your staff has any questions concerning this report,
           please contact me on (202) 512-4523 or by e-mail at
           [39][email protected] . Contact points for our Offices of
           Congressional Relations and Public Affairs are on the last page of
           this report. GAO staff that made major contributions to this
           report are listed in appendix VIII.

           Brian J. Lepore, Director
			  Defense Capabilities and Management

           List of Congressional Addressees

The Honorable Carl Levin: 
Chairman: 
The Honorable John McCain: 
Ranking Member: 
Committee on Armed Services: 
United States Senate: 

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

The Honorable Tim Johnson: 
Chairman: 
The Honorable Kay Bailey Hutchison: 
Ranking Member: 
Subcommittee on Military Construction, Veterans Affairs, and Related 
Agencies: 
Committee on Appropriations: 
United States Senate: 

The Honorable Susan Collins: 
Ranking Member: 
Committee on Homeland Security and Governmental Affairs: 
United States Senate: 

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

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

The Honorable Chet Edwards: 
Chairman: 
The Honorable Roger F. Wicker: 
Ranking Member: 
Subcommittee on Military Construction, Veterans Affairs, and Related 
Agencies: 
Committee on Appropriations: 
House of Representatives: 

The Honorable Tom Davis: 
Ranking Member: 
Committee on Oversight and Government Reform: 
House of Representatives: 

           Appendix I: Scope and Methodology

           We reviewed the Defense Base Closure and Realignment Commission's
           182 recommendations to realign and close military bases, but
           mostly focused our work on the recommendations that changed the
           most in expected costs and savings compared to the Commission's
           estimates. Recognizing that the Department of Defense (DOD) was in
           the process of initial planning for base realignment and closure
           (BRAC) implementation, and the associated financial data were
           changed frequently during our review, we compared BRAC cost and
           savings estimates primarily using two key publicly available
           documents--the 2005 BRAC Commission report to the President
           released in September 2005 and DOD's latest BRAC budget submission
           provided to Congress in February 2007. We used data from the BRAC
           Commission report to the President because the estimates contained
           in this report were the closest estimates available associated
           with the final and approved BRAC recommendations. We used DOD's
           most recent BRAC budget submission because it was the most
           authoritative information publicly available for making broad
           comparisons of BRAC cost and savings estimates. Specifically, we
           compared the change in cost estimates as well as the estimates for
           net annual recurring savings that DOD expects to incur after BRAC
           implementation and noted those recommendations that have increased
           the most in expected costs and decreased the most in expected
           savings. In addition, we used the BRAC Commission's data generated
           from DOD's estimation model, known as the Cost of Base Realignment
           Actions, to determine changes in expected one-time costs, to
           include military construction cost estimates and inflation. We
           generally reported costs and savings in current dollars and not
           constant dollars except where noted.

           To calculate DOD's estimate of net annual recurring savings, we
           used OSD's data provided to us for estimated savings in fiscal
           year 2012--the year after OSD expects all recommendations to be
           completed--because these data more fully captured these savings
           and allowed us to replicate the same methodology used by the BRAC
           Commission in its calculation of this estimate. We used OSD's
           fiscal year 2012 data and subtracted the estimates for annual
           recurring costs from the estimates for annual recurring savings,
           which is the same method both DOD and we have used for prior BRAC
           rounds. To determine expected 20-year savings--also known as the
           20-year net present value--we used the same formulas and
           assumptions as DOD and the BRAC Commission used to calculate these
           savings.1 Specifically, we used DOD's BRAC fiscal year 2008 budget
           data for expected costs and savings to implement each
           recommendation for fiscal years 2006 through 2011. We also used
           data that the BRAC Office in the Office of the Deputy Under
           Secretary of Defense for Installations and Environment provided us
           for expected net annual recurring savings after the completion of
           each recommendation for fiscal years 2012 to 2025. We then
           converted these data to fiscal year constant 2005 dollars using
           DOD price indexes to distinguish real changes from changes due to
           inflation. We used fiscal year 2005 dollars to calculate 20-year
           savings because the BRAC Commission also used fiscal year 2005
           dollars for this calculation.2 Finally, we calculated how many
           years it would take for expected BRAC savings to recoup the
           expected initial investment costs to implement the
           recommendations, comparing the fiscal years, or break-even points,
           when cumulative net savings would exceed cumulative one-time
           costs. We did this to be consistent with the way DOD had reported
           their break-even points for past BRAC rounds, which is a
           methodology we also replicated in our prior reports on BRAC
           implementation.

           To assess the reliability of DOD's BRAC cost and savings data, we
           tested computer-generated data for errors, reviewed relevant
           documentation, and discussed data quality control procedures with
           officials at the Office of the Secretary of Defense (OSD) BRAC
           Office. We determined that the data were sufficiently reliable for
           the purposes of making broad comparisons between DOD's reported
           cost and savings estimates and the BRAC Commission's reported
           estimates.

           To determine why DOD's estimates changed compared to the BRAC
           Commission's estimates, we reviewed over 200 OSD-approved business
           plans that outlined actions, time frames, and financial estimates
           for implementing each BRAC recommendation. We also obtained and
           analyzed information from the U.S. Army Corps of Engineers about
           its recent initiative to transform how it manages military
           construction projects and how these new initiatives are expected
           to reduce military construction costs during BRAC implementation.
           We did not validate the services' or defense agencies' BRAC
           military construction requirements because DOD's Office of the
           Inspector General, the Army Audit Agency, the Naval Audit Service,
           and the Air Force Audit Agency were reviewing BRAC military
           construction projects at the time of this report. Their work in
           this area is expected to continue over the next several years.
           However, we met with staff of these audit services periodically
           over the course of our review.
			  
1 DOD reported 20-year savings estimates for each base closure and
realignment recommendation in its report to the BRAC Commission.
Subsequently, the BRAC Commission also reported 20-year savings estimates
for each BRAC recommendation in its report to the President. OSD BRAC
officials told us that DOD does not include 20-year savings estimates in
its BRAC budgets to Congress because this information is not required.
Consequently, we calculated 20-year savings for comparison purposes in a
manner consistent with the BRAC Commission's calculation of these savings.

2 Applying the same formulas and assumptions as used by the BRAC
Commission, we used a 2.8 percent discount rate to calculate the
accumulated net present value of expected 20-year savings.			  

           Further, we met periodically with officials at the OSD BRAC office
           and corresponding BRAC implementation offices in the Army, Navy,
           and Air Force to determine why DOD's estimates changed compared to
           the BRAC Commission's estimates. We also met with these officials
           to discuss their roles and responsibilities as they began BRAC
           implementation planning and to obtain their perspectives on any
           implementation challenges that they encountered. Given the
           unprecedented number of BRAC 2005 closures and realignments, we
           focused our analysis on broad issues affecting DOD's cost and
           savings estimates and implementation challenges rather than on
           specific implementation issues of individual recommendations.

           To obtain the perspective of installation and command officials
           directly involved in BRAC implementation planning and execution,
           we visited 17 bases and 8 major commands affected by BRAC. We
           selected these bases and commands because they were among the
           closures or realignments that DOD projected to have significant
           costs or savings, or because we wanted to obtain more information
           about particular implementation issues. Installations we visited
           include:

                        o Aberdeen Proving Ground, Maryland;
                        o Brooks City-Base, Texas;
                        o Eglin Air Force Base, Florida;
                        o Fort Belvoir, Virginia;
                        o Fort Benning, Georgia;
                        o Fort Bliss, Texas;
                        o Fort Dix, New Jersey;
                        o Fort McPherson, Georgia;
                        o Fort Monmouth, New Jersey;
                        o Fort Monroe, Virginia;
                        o Fort Sam Houston, Texas;
                        o Lackland Air Force Base, Texas;
                        o McGuire Air Force Base, New Jersey;
                        o National Naval Medical Center, Maryland;
                        o Randolph Air Force Base, Texas;
                        o Rock Island Army Arsenal, Illinois; and
                        o Walter Reed Army Medical Center, District of
                        Columbia.

           In addition, we met with officials from eight commands to obtain a
           command-level perspective about BRAC implementation and because
           these commands were involved in coordinating the business plans or
           were responsible for key decisions in implementation planning.
           Commands visited include the Air Force's Air Education and
           Training Command; Army Communications-Electronics Life Cycle
           Management Command; Army Forces Command; Army Information Systems
           Engineering Command; Army Medical Command; Army Training and
           Doctrine Command; Naval Installations Command; and the U.S. Army
           Corps of Engineers. As we obtained information concerning
           implementation challenges during interviews, we assessed the
           reliability of that information by asking similar questions from
           officials at different military services at the installation and
           headquarters levels.

           We conducted our work from November 2005, when the BRAC
           recommendations became effective, through October 2007 so we could
           analyze data in DOD's BRAC budget submission provided to Congress
           in February 2007. Our work was done in accordance with generally
           accepted government auditing standards.
			  
			  Appendix II: BRAC Recommendations with the Largest Increases in
			  Estimated Costs

           Appendix II lists specific base realignment and closure (BRAC)
           recommendations that have increased the most in estimated one-time
           costs compared to the BRAC Commission estimates reported in
           September 2005. Table 3 shows that the Department of Defense's
           (DOD) one-time implementation cost estimates have increased by
           more than $50 million each for 33 recommendations compared to BRAC
           Commission estimates.

Table 3: BRAC Recommendations That Increased by More Than $50 Million in
Estimated One-Time Costs (Fiscal Years 2006 through 2011)

Dollars in millions                
                                                                Difference
                                       BRAC 2005 DOD's fiscal                 
                                      Commission    year 2008                 
                                        reported       budget                 
Recommendation                     estimatesa   estimatesb  Amount Percent 
Close National                                                             
Geospatial-Intelligence Agency                                             
leased locations and realign                                               
others to Fort Belvoir, VA          $1,117.30    $2,090.97 $973.67      87 
Realign Walter Reed Army Medical                                           
Center to Bethesda National Naval                                          
Medical Center, MD and to Fort                                             
Belvoir, VA                            988.76     1,688.38  699.62      71 
Realign Maneuver Training to Fort                                          
Benning, GA                            773.10     1,454.65  681.55      88 
Close Fort Monmouth, NJ                780.43     1,458.11  677.68      87 
Co-locate miscellaneous OSD,                                               
defense agency, and field activity                                         
leased locations                       601.75     1,200.00  598.25      99 
Establish San Antonio Regional                                             
Medical Center and realign                                                 
enlisted medical training to Fort                                          
Sam Houston, TX                      1,040.90     1,591.02  550.12      53 
Realign to establish Combat                                                
Service Support Center at Fort                                             
Lee, VA                                754.00     1,145.40  391.40      52 
Realign supply, storage, and                                               
distribution management                192.70       577.32  384.62     200 
Consolidate Defense Information                                            
Systems Agency at Fort Meade, MD       219.98       572.83  352.85     160 
Close Fort McPherson, GA               214.54       550.07  335.53     156 
Close Brooks City-Base, TX             325.30       592.30  267.00      82 
Consolidate/co-locate active and                                           
reserve personnel and recruiting                                           
centers for Army and Air Force         128.73       370.02  241.29     187 
Co-locate military department                                              
investigation agencies with DOD                                            
Counterintelligence and Security                                           
Agency to Marine Corps Base                                                
Quantico, VA                           171.99       388.14  216.15     126 
Close Fort Monroe, VA                   72.40       288.06  215.66     298 
Co-locate missile and space                                                
defense agencies to Redstone                                               
Arsenal, AL                            178.20       373.53  195.33     110 
Close Naval Support Activity New                                           
Orleans, LA                             46.15       232.73  186.58     404 
Realign Fort Hood, TX                  435.80       621.75  185.95      43 
Realign to create joint centers                                            
for chemical, biological, and                                              
medical research, development, and                                         
acquisition                             55.23       233.92  178.69     324 
Close Lone Star Army Ammunition                                            
Plant, TX                               29.00       173.43  144.43     498 
Consolidate depot level reparable                                          
procurement management                                                     
consolidation                          124.90       263.89  138.99     111 
Reserve Component Transformation,                                          
TX                                     375.60       500.79  125.19      33 
Co-locate miscellaneous Air Force                                          
leased locations and National                                              
Guard Headquarters leased                                                  
locations                               90.50       212.47  121.97     135 
Realign to relocate undergraduate                                          
pilot and navigator training            71.70       193.19  121.49     169 
Relocate Army headquarters and                                             
field operating activities             199.90       320.85  120.95      61 
Close Fort Gillem, GA                   56.80       150.43   93.63     165 
Relocate miscellaneous Department                                          
of the Navy leased locations            61.75       155.07   93.32     151 
Realign to create a Naval                                                  
Integrated Weapons and Armaments                                           
Research, Development, and                                                 
Acquisition, Test and Evaluation                                           
Center mostly at Naval Air Weapons                                         
Station China Lake, CA                 343.33       426.95   83.62      24 
Realign to relocate Air Defense                                            
Artillery Center and School to                                             
Fort Sill, OK                          247.00       326.16   79.16      32 
Reserve Component Transformation,                                          
OK                                     168.70       238.89   70.19      42 
Consolidate Transportation Command                                         
components at Scott Air Force                                              
Base, IL                               101.88       171.60   69.72      68 
Realign defense research                                                   
service-led laboratories at                                                
multiple locations                     136.05       203.39   67.34      49 
Reserve Component Transformation,                                          
NY                                     103.80       162.65   58.85      57 
Close Naval Air Station Brunswick,                                         
ME                                    $193.12      $245.97  $52.85      27 

Source: GAO analysis of BRAC Commission and DOD data.

aIn constant fiscal year 2005 dollars.

bIn current dollars.

Appendix III: BRAC Recommendations with the Largest Decreases in Estimated
Net Annual Recurring Savings

Appendix III lists specific base realignment and closure (BRAC)
recommendations that have decreased the most in estimated net annual
recurring savings compared to the BRAC Commission estimates. Table 4 shows
that the Department of Defense's (DOD) net annual recurring savings
estimates have decreased by more than $25 million each for 13
recommendations compared to BRAC Commission estimates.

Table 4: BRAC Recommendations That Have Decreased by More Than $25 Million
in Estimated Net Annual Recurring Savings (Projected for Fiscal Year 2012)

Dollars in millions                                               
                                                               Difference
                                      BRAC 2005                               
                                     Commission                               
                                       reported DOD current           Percent 
Recommendation                    estimatesa  estimatesb   Amount decrease 
Close National                                                             
Geospatial-Intelligence Agency                                             
leased locations and realign                                               
others at Fort Belvoir, VA           $127.70      $35.48 ($92.23)       72 
Establish joint bases at multiple                                          
locations                             183.76      116.39  (67.37)       37 
Realign Fort Hood, TXc               (45.27)    (105.78)  (60.51)      134 
Realign supply, storage, and                                               
distribution management               203.21      157.58  (45.63)       22 
Realign Grand Forks Air Force                                              
Base, ND                               66.69       25.06  (41.63)       62 
Close Deseret Chemical Depot, UT       37.95           0  (37.95)      100 
Establish San Antonio Regional                                             
Medical Center and realign                                                 
enlisted medical training to Fort                                          
Sam Houston, TX                       129.04       91.22  (37.82)       29 
Close Naval Air Station Willow                                             
Grove, PA and realign Cambria                                              
Regional Airport, Johnstown, PA        73.90       36.32  (37.58)       51 
Realign to establish Joint Strike                                          
Fighter initial joint training                                             
site at Eglin Air Force Base, FLc     (3.33)     (40.69)  (37.36)     1122 
Close Umatilla Chemical Depot, OR      34.69           0  (34.69)      100 
Realign Otis Air National Guard                                            
Base, MA, and Lambert-St. Louis                                            
International Airport Air Guard                                            
Station, MOc                           27.88      (6.21)  (34.09)      122 
Realign Operational Army                                                   
(Integrated Global Presence and                                            
Basing Strategy)c                   (294.68)    (324.78)  (30.10)       10 
Co-locate miscellaneous Air Force                                          
leased locations and National                                              
Guard Headquarters leased                                                  
locations                              30.84        1.08  (29.76)       97

Source: GAO analysis of BRAC Commission and DOD data.

aIn constant fiscal year 2005 dollars.

bData provided by DOD for fiscal year 2012 expected savings.

cBoth the BRAC Commission and subsequently DOD estimated that this
recommendation would incur a net annual recurring cost (denoted by the
parenthesis) after the BRAC implementation period rather than a net annual
recurring savings. We used the parenthesis to denote an increase in net
annual recurring cost. We included this recommendation because DOD's
current estimate shows net annual recurring cost has increased by more
than $25 million.

Appendix IV: BRAC Recommendations DOD Expects to Cost the Most

Appendix IV lists individual base realignment and closure (BRAC)
recommendations that the Department of Defense (DOD) expects to cost the
most to implement. DOD expects 24 recommendations (13 percent) to generate
65 percent of the one-time costs to implement BRAC recommendations during
fiscal years 2006 through September 15, 2011, as shown in table 5.

Table 5: BRAC Recommendations DOD Expects to Cost the Most to Implement
(Fiscal Years 2006 through 2011)

Dollars in millions                                                        
Recommendation                                              One-time costs 
Realign Operational Army (Integrated Global Presence and                   
Basing Strategy)                                                    $2,918 
Close National Geospatial-Intelligence Agency leased                       
locations and realign others to Fort Belvoir, VA                     2,091 
Realign Walter Reed Army Medical Center to Bethesda                        
National Naval Medical Center, MD and to Fort Belvoir, VA            1,688 
Establish San Antonio Regional Medical Center and realign                  
medical enlisted training to Fort Sam Houston, TX                    1,591 
Close Fort Monmouth, NJ                                              1,458 
Realign Maneuver Training to Fort Benning, GA                        1,455 
Co-locate miscellaneous OSD, defense agency, and field                     
activity leased locations                                            1,200 
Realign to establish Combat Service Support Center at Fort                 
Lee, VA                                                              1,145 
Realign Fort Hood, TX                                                  622 
Close Brooks City-Base, TX                                             592 
Realign supply, storage, and distribution management                   577 
Consolidate Defense Information Systems Agency to Fort                     
Meade, MD                                                              573 
Close Fort McPherson, GA                                               550 
Army reserve component transformation, TX                              501 
Realign to create a Naval Integrated Weapons and Armaments                 
Research, Development, and Acquisition, Test and Evaluation                
Center mostly at Naval Air Weapons Station China Lake, CA              427 
Co-locate military department investigation agencies with                  
DOD Counterintelligence and Security Agency to Marine Corps                
Base Quantico, VA                                                      388 
Co-locate missile and space defense agencies to Redstone                   
Arsenal, AL                                                            374 
Consolidate/co-locate active and reserve personnel and                     
recruiting centers for Army and Air Force                              370 
Realign Fort Bragg, NC                                                 343 
Realign to relocate Air Defense Artillery Center and School                
to Fort Sill, OK                                                       326 
Relocate Army headquarters and field operating activities              321 
Close Fort Monroe, VA                                                  288 
Consolidate Defense Finance and Accounting Service                     280 
Close Naval Air Station Willow Grove, PA and realign                       
Cambria Regional Airport, Johnstown, PA                                266 
Total one-time estimated costs from the recommendations                    
listed above                                                       $20,344 
Total one-time estimated costs from all recommendations            $31,160 
Percentage of one-time costs from recommendations listed                   
above of all recommendations                                           65% 

Source: GAO analysis based on DOD data.

Note: Totals may not add because of rounding.

Appendix V: BRAC Recommendations DOD Expects to Save the Most Annually

Appendix V lists individual base realignment and closure (BRAC)
recommendations that the Department of Defense (DOD) expects to save the
most annually after it has implemented the recommendations. DOD expects 28
recommendations (15 percent) to generate 85 percent of the net annual
recurring savings as shown in table 6.

Table 6: BRAC Recommendations DOD Expects to Save the Most Annually After
Implementation (Projected for Fiscal Year 2012)

Fiscal year 2012 dollars in millions                                       
                                                         Net annual recurring 
Recommendation                                                    savingsa 
Realign to establish fleet readiness centers                          $304 
Consolidate Defense Finance and Accounting Service                     284 
Realign Cannon Air Force Base, NMb                                     260 
Realign Pope Air Force Base, NC                                        212 
Realign Walter Reed Army Medical Center to Bethesda                        
National Naval Medical Center, MD and to Fort                              
Belvoir, VA                                                            172 
Consolidate/co-locate active and reserve personnel                         
and recruiting centers for Army and Air Force                          170 
Realign supply, storage, and distribution management                   158 
Close Fort Monmouth, NJ                                                154 
Consolidate depot level reparable procurement                              
management consolidation                                               150 
Realign to establish Combat Service Support Center at                      
Fort Lee, VA                                                           148 
Realign Maneuver Training to Fort Benning, GA                          133 
Establish joint bases at multiple locations                            116 
Close Naval Air Station Brunswick, ME                                  115 
Realign by converting medical inpatient services to                        
clinics at various installations                                       106 
Consolidate Transportation Command components at                           
Scott Air Force Base, IL                                                97 
Close Fort McPherson, GA                                                94 
Close Brooks City-Base, TX                                              92 
Establish San Antonio Regional Medical Center and                          
realign enlisted medical training to Fort Sam                              
Houston, TX                                                             91 
Co-locate miscellaneous OSD, defense agencies, and                         
field activity leases at Fort Belvoir, VA                               72 
Close Naval Station Ingleside, TX and realign Naval                        
Air Station Corpus Christi, TX                                          69 
Realign to create a Naval Integrated Weapons and                           
Armaments Research, Development, and Acquisition,                          
Test and Evaluation Center mostly at Naval Air                             
Weapons Station China Lake, CA                                          68 
Close Fort Monroe, VA                                                   65 
Consolidate Defense Information Systems Agency at                          
Fort Meade, MD                                                          52 
Relocate medical command headquarters                                   51 
Realign to relocate Air Defense Artillery Center and                       
School to Fort Sill, OK                                                 50 
Co-locate missile and space defense agencies to                            
Redstone Arsenal, AL                                                    45 
Realign defense research service-led laboratories at                       
multiple locations                                                      43 
Close Naval Air Station Atlanta, GA                                     42 
Total net annual recurring savings from the                                
recommendations listed above                                        $3,413 
Total net annual recurring savings from all                                
recommendations                                                     $4,014 
Percentage of net annual recurring savings from                            
recommendations listed above of all recommendations                    85% 

Source: GAO analysis based on DOD data.

Note: Totals may not add because of rounding.

aData provided by DOD for fiscal year 2012 expected savings.

bIn May 2005, DOD proposed closing Cannon Air Force Base, New Mexico. In
September 2005, the BRAC Commission stated that Cannon could remain open
if DOD identified a new mission for the base. Subsequently, the Air Force
announced in June 2006 that Cannon will remain open because they plan to
activate a new mission at the installation.

Appendix VI: BRAC Recommendations DOD Expects to Save the Most Over a
20-Year Period 

Appendix VI lists individual base realignment and closure (BRAC)
recommendations that the Department of Defense (DOD) expects to save the
most over a 20-year period. DOD expects the implementation of 29
recommendations (16 percent) to generate 85 percent of the 20-year savings
as shown in table 7.

Table 7: BRAC Recommendations DOD Expects to Save the Most Over a 20-Year
Period (Fiscal Years 2006 through 2025)

Constant fiscal year 2005 dollars in millions                              
                                                          20-year net present 
Recommendation                                                      valuea 
Realign to establish fleet readiness centers                        $3,361 
Realign Cannon Air Force Base, NMb                                   2,837 
Consolidate Defense Finance and Accounting Service                   2,800 
Realign Pope Air Force Base, NC                                      2,382 
Consolidate/co-locate active and reserve personnel and                     
recruiting centers for Army and Air Force                            1,436 
Consolidate depot level reparable procurement                              
management                                                           1,367 
Realign supply, storage, and distribution management                 1,251 
Establish joint bases at multiple locations                          1,032 
Realign by converting medical inpatient services to                        
clinics at various installations                                     1,015 
Consolidate Transportation Command components at Scott                     
Air Force Base, IL                                                     930 
Close Naval Air Station Brunswick, ME                                  905 
Close Naval Station Ingleside, TX and realign Naval                        
Air Station Corpus Christi, TX                                         488 
Relocate medical command headquarters                                  482 
Realign to establish Combat Service Support Center at                      
Fort Lee, VA                                                           457 
Realign commodity management privatization                             454 
Close Fort McPherson, GA                                               452 
Close Naval Station Pascagoula, MS                                     446 
Close Brooks City-Base, TX                                             417 
Close Fort Monmouth, NJ                                                381 
Close Naval Air Station Atlanta, GA                                    372 
Close Fort Monroe, VA                                                  330 
Co-locate miscellaneous Army leased locations                          319 
Realign to create a Naval Integrated Weapons and                           
Armaments Research, Development, and Acquisition, Test                     
and Evaluation Center mostly at Naval Air Weapons                          
Station China Lake, CA                                                 285 
Realign to consolidate maritime command, control,                          
communications, computers, intelligence, surveillance,                     
and reconnaissance, research, development, and                             
acquisition, test and evaluation functions at multiple                     
locations                                                              272 
Realign defense research service-led laboratories at                       
multiple locations                                                     268 
Realign Army Reserve Command and Control - Northeast                   260 
Realign Mountain Home Air Force Base, ID                               254 
Realign Walter Reed Army Medical Center to Bethesda                        
National Naval Medical Center, MD and to Fort Belvoir,                     
VA                                                                     251 
Close Fort Gillem, GA                                                  249 
Total savings from the recommendations listed above                $25,756 
Total savings from only recommendations that accrue a                      
net savings after 20 years                                         $30,358 
Percentage of savings from recommendations listed                          
above of all recommendations that accrue a net savings                     
after 20 years                                                         85% 

Source: GAO analysis based on DOD data.

Notes: Totals may not add because of rounding.

aNet present value: A financial calculation that takes the time value of
money into account by determining the present value of the up-front
initial investment minus future net savings over a specified period of
time. In the context of BRAC, net present value is the total one-time
costs minus the total net savings that DOD expects to incur from fiscal
year 2006 through fiscal year 2025 to project 20-year savings at 2.8
percent discount rate.

bIn May 2005, DOD proposed closing Cannon Air Force Base, New Mexico. In
September 2005, the BRAC Commission stated that Cannon could remain open
if DOD identified a new mission for the base. Subsequently, the Air Force
announced in June 2006 that Cannon will remain open because they plan to
activate a new mission at the installation.

Appendix VII: Comments from the Department of Defense

Appendix VIII: GAO Contact and Staff Acknowledgments

GAO Contact

Brian J. Lepore, (202) 512-4523 or [email protected]

Acknowledgments

In addition to the individual named above, Barry Holman, Director
(retired); Laura Talbott, Assistant Director; Leigh Caraher; Grace
Coleman; Susan Ditto; Thomas Mahalek; Julia Matta; Charles Perdue;
Benjamin Thompson; and Tristan T. To made key contributions to this
report.

Related GAO Products

Military Base Realignments and Closures: Impact of Terminating,
Relocating, or Outsourcing the Services of the Armed Forces Institute of
Pathology. [41]GAO-08-20 . Washington, D.C.: November 9, 2007.

Military Base Realignments and Closures: Transfer of Supply, Storage, and
Distribution Functions from Military Services to Defense Logistics Agency.
[42]GAO-08-121R . Washington, D.C.: October 26, 2007.

Defense Infrastructure: Challenges Increase Risks for Providing Timely
Infrastructure Support for Army Installations Expecting Substantial
Personnel Growth. [43]GAO-07-1007 . Washington, D.C.: September 13, 2007.

Military Base Realignments and Closures: Plan Needed to Monitor Challenges
for Completing More than 100 Armed Forces Reserve Centers. [44]GAO-07-1040
. Washington, D.C.: September 13, 2007.

Military Base Realignments and Closures: Observations Related to the 2005
Round. [45]GAO-07-1203R . Washington, D.C.: September 6, 2007.

Military Base Closures: Projected Savings from Fleet Readiness Centers Are
Likely Overstated and Actions Needed to Track Actual Savings and Overcome
Certain Challenges. [46]GAO-07-304 . Washington, D.C.: June 29, 2007.

Military Base Closures: Management Strategy Needed to Mitigate Challenges
and Improve Communication to Help Ensure Timely Implementation of Air
National Guard Recommendations. [47]GAO-07-641 . Washington, D.C.: May 16,
2007.

Military Base Closures: Opportunities Exist to Improve Environmental
Cleanup Cost Reporting and to Expedite Transfer of Unneeded Property.
[48]GAO-07-166 . Washington, D.C.: January 30, 2007.

Military Bases: Observations on DOD's 2005 Base Realignment and Closure
Selection Process and Recommendations. [49]GAO-05-905 . Washington, D.C.:
July 18, 2005.

Military Bases: Analysis of DOD's 2005 Selection Process and
Recommendations for Base Closures and Realignments. [50]GAO-05-785 .
Washington, D.C.: July 1, 2005.

Military Base Closures: Observations on Prior and Current BRAC Rounds.
[51]GAO-05-614 . Washington, D.C.: May 3, 2005.

Military Base Closures: Updated Status of Prior Base Realignments and
Closures. [52]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. [53]GAO-04-760 . Washington, D.C.: May
17, 2004.

Military Base Closures: Observations on Preparations for the Upcoming Base
Realignment and Closure Round. [54]GAO-04-558T . Washington, D.C.: March
25, 2004.

(350840)

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Highlights of [62]GAO-08-159 , a report to congressional addressees

December 2007

MILITARY BASE REALIGNMENTS AND CLOSURES

Cost Estimates Have Increased and Are Likely to Continue to Evolve

The 2005 Base Realignment and Closure (BRAC) round is the biggest, most
complex, and costliest ever. DOD viewed this round as a unique opportunity
to reshape its installations, realign forces to meet its needs for the
next 20 years, and achieve savings. To realize savings, DOD must first
invest billions of dollars in facility construction, renovation, and other
up-front expenses to implement the BRAC recommendations. However, recent
increases in estimated cost have become a concern to some members of
Congress.

Under the Comptroller General's authority to conduct evaluations on his
own initiative, GAO (1) compared the BRAC Commission's cost and savings
estimates to

DOD's current estimates, (2) assessed potential for change in DOD's
current estimates, and (3) identified broad implementation challenges. GAO
compared the BRAC Commission's estimates, which were the closest estimates
available associated with final BRAC recommendations, to DOD's current
estimates. GAO also visited 25 installations and major commands, and
interviewed DOD officials.

[63]What GAO Recommends

GAO recommends that DOD explain its estimated BRAC savings from personnel
reductions as compared to other savings to provide more transparency to
Congress. DOD concurred with our recommendation and agreed to explain
savings estimates in its BRAC budget material to Congress.

Since the BRAC Commission issued its cost and savings estimates in 2005,
DOD plans to spend more and save less, and it will take longer than
expected to recoup up-front costs. Compared to the BRAC Commission's
estimates, DOD's cost estimates to implement BRAC recommendations
increased from $21 billion to $31 billion (48 percent), and net annual
recurring savings estimates decreased from $4.2 billion to $4 billion (5
percent). DOD's one-time cost estimates to implement over 30 of the 182
recommendations have increased more than $50 million each over the BRAC
Commission's estimates, and DOD's cost estimates to complete 6 of these
recommendations have increased by more than $500 million each. Moreover,
GAO's analysis of DOD's current estimates shows that it will take until
2017 for DOD to recoup up-front costs to implement BRAC 2005--4 years
longer than the BRAC Commission's estimates show. Similarly, the BRAC
Commission estimated that BRAC 2005 implementation would save DOD about
$36 billion over a 20-year period ending in 2025, whereas our analysis
shows that BRAC implementation is now expected to save about 58 percent
less, or about $15 billion.

DOD's estimates to implement BRAC recommendations are likely to change
further due to uncertainties surrounding implementation details and
potential increases in military construction and environmental cleanup
costs. Moreover, DOD may have overestimated annual recurring savings by
about 46 percent or $1.85 billion. DOD's estimated annual recurring
savings of about $4 billion includes $2.17 billion in eliminated overhead
expenses, which will free up funds that DOD can then use for other
priorities, but it also includes $1.85 billion in military personnel
entitlements, such as salaries, for personnel DOD plans to transfer to
other locations. While DOD disagrees, GAO does not believe transferring
personnel produces tangible dollar savings since these personnel will
continue to receive salaries and benefits. Because DOD's BRAC budget does
not explain the difference between savings attributable to military
personnel entitlements and savings that will make funds available for
other uses, DOD is generating a false sense that all of its reported
savings could be used to fund other defense priorities.

DOD has made progress in planning for BRAC 2005 implementation, but
several complex challenges to the implementation of those plans increase
the risk that DOD might not meet the statutory September 2011 deadline.
DOD faces a number of challenges to synchronize the realignment of over
123,000 personnel with the completion of over $21 billion in new
construction or renovation projects by 2011. For example, the time frames
for completing many BRAC recommendations are so closely sequenced and
scheduled to be completed in 2011 that any significant changes in
personnel movement schedules or construction delays could jeopardize DOD's
ability to meet the statutory 2011 deadline. Additionally, BRAC 2005,
unlike prior BRAC rounds, included more joint recommendations involving
more than one military component, thus creating challenges in achieving
unity of effort among the services and defense agencies.

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