Military Bases: Analysis of DOD's 1995 Process and Recommendations for
Closure and Realignment (Chapter Report, 04/14/95, GAO/NSIAD-95-133).

During the 1995 round of base closures, the Pentagon's recommendations
to close surplus military bases were generally sound, although GAO
questions the reasonableness of specific recommendations.  For example,
some excess facilities were spared only because of high up-front
shutdown costs.  GAO singles out the Air Force process as particularly
subjective and poorly documented.  Also, the Navy did not consistently
apply Defense Department (DOD) criteria when it decided to retain some
facilities because of the economic impact their closure would have on
local communities.  Meanwhile, DOD's estimate of $1.8 billion in annual
savings did not take into accounting potentially costly environmental
cleanup activities at military bases.  GAO summarized this report in
testimony before Congress; see: Military Base Closures: Analysis of
DOD's Process and Recommendations for 1995, by Henry L. Hinton, Jr.,
Assistant Comptroller General for National Security and International
Affairs Programs, before the Base Closure and Realignment Commission.
GAO/T-NSIAD-95-132, Apr. 17 (15 pages).

--------------------------- Indexing Terms -----------------------------

 REPORTNUM:  NSIAD-95-133
     TITLE:  Military Bases: Analysis of DOD's 1995 Process and 
             Recommendations for Closure and Realignment
      DATE:  04/14/95
   SUBJECT:  Base closures
             Military downsizing
             Military bases
             Cost effectiveness analysis
             Federal facility relocation
             Site selection
             Federal agency reorganization
             Defense cost control
             Defense capabilities
             Base realignments
IDENTIFIER:  DOD Cost of Base Realignment Action Model
             
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Cover
================================================================ COVER


Report to the Congress and the Chairman, Defense Base Closure and
Realignment Commission

April 1995

MILITARY BASES - ANALYSIS OF DOD'S
1995 PROCESS AND RECOMMENDATIONS
FOR CLOSURE AND REALIGNMENT

GAO/NSIAD-95-133

Military Bases


Abbreviations
=============================================================== ABBREV

  AAA - Army Audit Agency
  ABM - Anti-Ballistic Missile
  AFAA - Air Force Audit Agency
  AFB - Air Force Base
  AFEWES - Air Force Electronic Warfare Evaluation Simulator
  AFMC - Air Force Materiel Command
  AFRES - Air Force Reserve
  AGMC - Aerospace Guidance and Metrology Center
  AGS - Air Guard Station
  ALC - Air Logistics Center
  AMSA - Area Maintenance Support Activity
  ARB - Air Reserve Base
  ARS - Air Reserve Station
  ASO - Aviation Supply Office
  ATCOM - Aviation Troop Command
  BEA - Bureau of Economic Analysis
  BLS - Bureau of Labor Statistics
  BOS - Base Operating Support
  BRAC - Base Realignment and Closure
  BSAT - Base Structure Analysis Team
  BSEC - Base Structure Evaluation Group
  C4I - Command, Control, Communications, Computers, and Intelligence
  CERCLA - Comprehensive Environmental Response, Compensation and
     Liabilities Act
  CHAMPUS - Civilian Health and Medical Program of the Uniformed
     Services
  COBRA - Cost of Base Realignment Actions
  DCMC - Defense Contract Management Command
  DCMD - Defense Contract Management District
  DCSC - Defense Construction Supply Center
  DDCO - Defense Depot Columbus, Ohio
  DDMT - Defense Depot Memphis, Tennessee
  DDOU - Defense Depot Ogden, Utah
  DDRV - Defense Depot Richmond, Virginia
  DFSC - Defense Fuel Supply Center
  DGSC - Defense General Supply Center
  DIS - Defense Investigative Service
  DISC - Defense Industrial Supply Center
  DLA - Defense Logistics Agency
  DLSC - Defense Logistics Services Center
  DOD - Department of Defense
  DODIG - Department of Defense, Inspector General
  DOE - Department of Energy
  DOSO - DLA's Operations Support Office
  DPSC - Defense Personnel Support Center
  DRMS - Defense Reutilization And Marketing Service
  DSDC - DLA Systems Design Center
  EFANW - Engineering Field Activity Northwest
  EIG - Engineering Installation Group
  FISC - Fleet and Industrial Supply Center
  GSA - General Services Administration
  IAP - International Airport
  IG - Inspector General
  IC&AD - Investigations Control and Automation Directorate
  ICP - Inventory Control Point
  ISSC - Information Systems Software Command
  IUSS - Integrated Undersea Surveillance System
  JPAT - Joint Process Action Team
  LANTIRN - Low Altitude Navigation and Targeting Infrared System
     (Night)
  LMI - Logistics Management Institute
  MCAS - Marine Corps Air Station
  MSA - Metropolitan Statistical Area
  NADEP - Naval Aviation Depot
  NAESU - Naval Aviation Engineering Service Unit
  NAF - Naval Air Facility
  NAS - Naval Air Station
  NATSF - Naval Air Technical Services Facility
  NAVFAC - Naval Facility
  NAVMASSO - Naval Management Systems Support Office
  NAVSEA - Naval Sea Systems Command
  NAWC - Naval Air Warfare Center
  NBDL - Naval Biodynamics Laboratory
  NCCOSC - Naval Command, Control, and Ocean Surveillance Center
  NHRC - Naval Health Research Center
  NISE - Naval In-Service Engineering
  NISMC - Naval Information Systems Management Center
  NMRI - Naval Medical Research Institute
  NPRDC - Navy Personnel Research and Development Center
  NPS - Nuclear Power School
  NPV - Net Present Value
  NRC - Naval Reserve Center
  NRD - Naval Recruiting District
  NRL - Naval Research Laboratory
  NSWC - Naval Surface Warfare Center
  NSY - Naval Shipyard
  NTC - Naval Training Center
  NTTC - Naval Technical Training Center
  NUWC - Naval Undersea Warfare Center
  NWAD - Naval Warfare Assessment Division
  OEA - Office of Economic Adjustment
  OMB - Office of Management and Budget
  ONR - Office of Naval Research
  OSD - Office of the Secretary of Defense
  PWC - Public Works Center
  R&D - Research and Development
  RDT&E - Research, Development, Test, and Evaluation
  REDCAP - Real-Time Digitally Controlled Analyzer Processor
  REDCOM - Readiness Command
  ROI - Return on Investment
  SAILS - Strategic Analysis of Integrated Logistics Systems
  SDIV - Southern Division
  SIMA - Shore Intermediate Maintenance Activity
  SIOP - Single Integrated Operational Plan
  SPAWAR - Space and Naval War Systems Command
  SRF - Ship Repair Facility
  SSN - Attack Submarine, Nuclear-Powered
  SUPSHIP - Supervisors of Shipbuilding, Conversion and Repair
  UPT - Undergraduate Pilot Training
  WDIV - Engineering Field Activity West

Letter
=============================================================== LETTER


B-261024

April 14, 1995

To the President of the Senate and the
Speaker of the House of Representatives

The Honorable Alan J.  Dixon
Chairman, Defense Base Closure and
 Realignment Commission

The Secretary of Defense announced his 1995 recommendations for base
closures and realignments to the Defense Base Closure and Realignment
Commission on February 28, 1995.  This report responds to the Defense
Base Closure and Realignment Act of 1990 (P.L.  101-510), as amended,
which requires that we provide the Congress and the Commission, by no
later than April 15, 1995, a report on the recommendations and
selection process.  We have identified issues for consideration by
the Commission as it completes its review of the Secretary of
Defense's recommendations.  Given that this is the last of three
biennial reviews authorized under the 1990 act, we are also including
matters for consideration by the Congress regarding the potential
need for continuing legislation to authorize further commission
reviews and authorize changes, as needed, to prior decisions. 

We are sending copies of this report to the Chairmen, Senate
Committee on Appropriations, Subcommittee on Defense; Senate
Committee on Armed Services; House Committee on Appropriations,
Subcommittee on National Security; House Committee on National
Security; the Secretaries of Defense, the Army, the Navy, and the Air
Force; and the Directors of the Defense Logistics Agency and the
Defense Investigative Service.  We will make copies available to
others on request. 

This report was prepared under the direction of David R.  Warren,
Director, Defense Management and NASA Issues, who may be reached on
(202) 512-8412 if you or your staff have any questions.  Other major
contributors are listed in appendix VI. 

Charles A.  Bowsher
Comptroller General
of the United States


EXECUTIVE SUMMARY
============================================================ Chapter 0


   PURPOSE
---------------------------------------------------------- Chapter 0:1

On February 28, 1995, the Secretary of Defense recommended closures,
realignments, and other actions affecting 146 domestic military
installations.  Of that number, 33 were described as closures of
major installations, and 26 as major realignments; an additional 27
were changes to prior base closing round decisions.  The Secretary
projects that the recommendations, when fully implemented, will yield
$1.8 billion in annual recurring savings.  As required by the Defense
Base Closure and Realignment Act of 1990, as amended, this report
presents GAO's analysis of the Secretary's recommendations and the
selection process used by the various defense components. 


   BACKGROUND
---------------------------------------------------------- Chapter 0:2

Closing unneeded military facilities is not easy, partly because of
public concern about the effects on communities and their economies
and concerns about the impartiality of the decision-making process. 
To overcome impediments to base closures, Congress enacted
legislation in 1988 (P.L.  100-526) that facilitated a successful
round of base closures.  Because of that success, Congress enacted
the 1990 Defense Base Closure and Realignment Act (Title XXIX, P.L. 
101-510), which authorized base closure rounds in 1991, 1993, and
1995.  The 1990 legislation outlined a process to close and realign
military installations, including the establishment of an
independent, bipartisan commission to review the Secretary of
Defense's closure recommendations.  Base realignment and closure
(BRAC) rounds in 1988, 1991, and 1993 resulted in decisions to fully
or partially close 70 major domestic bases and to close, realign, or
otherwise downsize hundreds of other bases, installations, and
activities.  DOD estimates that when fully implemented, these actions
will produce savings of $4 billion per year. 

The current BRAC round retained basically the same requirements and
procedures as those in 1993.  It included the requirement to use
certified data, that is, information that was accurate and complete
to the best of the originator's knowledge and belief.  This
requirement was designed to overcome concerns about the consistency
and reliability of data used in the process.  For the 1995 round, DOD
emphasized the exploration of opportunities for cross-service use of
common support assets.  It therefore established cross-service review
groups to provide the services with alternatives for realignments and
closures in the areas of depot maintenance, laboratories, test and
evaluation facilities, undergraduate pilot training, and medical
treatment facilities. 

As before, the Secretary's recommendations were to be based on
selection criteria established by DOD and on a 6-year force structure
plan.  As indicated in table 1, DOD established eight selection
criteria; they have remained unchanged since 1991. 



                           Table 1
           
             DOD Criteria for Selecting Bases for
                    Closure or Realignment

Category            Criteria
------------------  ----------------------------------------
Military value      1. Current and future mission
(priority           requirements and the impact on
consideration is    operational readiness of DOD's total
to be given to the  force.
four military
value criteria)     2. The availability and condition of
                    land, facilities, and associated
                    airspace at both the existing and
                    potential receiving locations.

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

                    4. Cost and manpower implications.

Return on           5. The extent and timing of potential
investment          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.

Impact              6. The economic impact on communities.

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

                    8. The environmental impact.
------------------------------------------------------------

   RESULTS IN BRIEF
---------------------------------------------------------- Chapter 0:3

Although the Department of Defense (DOD) has in recent years
undergone substantial downsizing in funding, personnel, and force
structure, commensurate infrastructure reductions have not been
achieved.  Despite some progress in reducing excess infrastructure,
it is generally recognized that much excess capacity will likely
remain after the 1995 BRAC round.  This view is supported by the
military components' and cross-service groups' analyses, which showed
far greater excess capacity than will be eliminated by the
Secretary's recommendations.  Currently, DOD projects that its fiscal
year 1996 budget represents, in real terms, a 39-percent reduction to
its fiscal year 1985 peak of recent times.  By way of comparison, its
1995 BRAC recommendations would produce cumulative BRAC reductions of
21 percent in inventory of major domestic bases since 1988. 

DOD's 1995 BRAC process was generally sound and well documented and
should result in substantial savings.  However, the recommendations
and selection process were not without problems and, in some cases,
raise questions about the reasonableness of specific recommendations. 
At the same time, GAO also noted that improvements were made to the
process from prior rounds, including more precise categorization of
bases and activities; this resulted in more accurate comparisons
between like facilities and functions and in better analytical
capabilities. 

GAO raises a number of issues it believes need attention by the
Congress and the Commission in considering DOD's recommendations: 

  DOD's attempt at reducing excess capacity by suggesting
     cross-service opportunities to the services facilitated some
     important results.  However, agreements for consolidating
     similar work done by two or more of the services were limited,
     and opportunities to achieve additional reductions in excess
     capacity and infrastructure were missed.  In particular, this
     was the case at depot maintenance activities and laboratory
     facilities. 

  Although the services have improved their processes with each
     succeeding BRAC round, some process problems continued to be
     identified.  In particular, the Air Force's process remained
     largely subjective and not well documented; also, it was
     influenced by preliminary estimates of base closure costs that
     changed when more focused analyses were made.  For these and
     other reasons, GAO questions a number of the Air Force's
     recommendations.  To a less extent, some of the services'
     decisions affecting specific closures and realignments also
     raise questions.  For example, the Secretary of the Navy did not
     consistly apply DOD's criteria when he excluded certain
  facilities from closure for economic impact reasons.  Because the
     legislation authorizing BRAC expires this year, some process
     will be needed to handle changes and problems that arise during
     implementation of this and earlier rounds. 


   PRINCIPAL FINDINGS
---------------------------------------------------------- Chapter 0:4


      BRAC SAVINGS ARE EXPECTED TO
      BE SUBSTANTIAL, BUT
      ESTIMATES ARE PRELIMINARY
-------------------------------------------------------- Chapter 0:4.1

GAO estimates that the 20-year net present value of savings from
DOD's recommendations will be $17.3 billion, with annual recurring
savings of almost $1.8 billion.  GAO notes that these estimates are
not based on budget quality data and are subject to some
uncertainties inherent in the process.  However, GAO believes the
savings will still be substantial.  At the same time, it should be
noted that environmental restoration was not a factor in the DOD base
closure decision-making process, and such restoration can represent a
significant cost following a base closure. 

DOD and its components improved their cost and savings estimates for
BRAC 1995 recommendations.  In developing cost estimates, they took
steps to develop more current and reliable sources of information and
placed greater reliance, where practicable, on standardized data. 
Some components sought to minimize the costs of base closures by
avoiding unnecessary military construction.  For example, the Navy
proposed a number of changes to prior BRAC decisions that will
further reduce infrastructure and avoid some previously planned
closure costs. 

GAO has identified a number of instances where projected savings from
base closures and realignments may fluctuate or be uncertain for a
variety of reasons.  They include uncertainties over future locations
of activities that must move from installations being closed or
realigned and errors in standard cost factors used in the services'
analyses.  Additionally, some projected savings involve salaries for
military personnel associated with BRAC reductions.  It is not clear
that such positions are always eliminated from the force structure. 
GAO completed a number of sensitivity tests to assess the potential
impact of these various factors on projected costs and savings and
found that they had a rather limited impact. 

It should be noted that shortly after the Secretary of Defense
announced his list of proposed closures and realignments, most DOD
components began undertaking more rigorous assessments of expected
costs of implementing the recommendations as a basis for developing
budget quality data.  Such efforts are currently underway primarily
in the Army and Air Force, and to less extent in the Navy. 


      SERVICE RECOMMENDATIONS WILL
      REDUCE INFRASTRUCTURE, BUT
      WITH LITTLE GAIN IN
      CROSS-SERVICING
-------------------------------------------------------- Chapter 0:4.2

The BRAC 1995 process reduced some infrastructure in common support
areas such as hospitals and pilot training facilities.  However, the
lack of progress in consolidating similar work done by two or more of
the services limited the extent of infrastructure reductions that
could have been achieved. 

DOD tried to strengthen the 1995 BRAC process by establishing
cross-service groups to provide the services with proposals for
consolidating similar work in the areas of depot maintenance,
laboratories, test and evaluation facilities, undergraduate pilot
training, and medical treatment facilities.  However, in the
laboratories and test and evaluation areas, the cross-service groups
were narrowly focused, and their initial proposals represented minor
workload shifts that offered little or no opportunity for a complete
base closure or cost-effective realignment.  While the depot
maintenance group identified excess capacity of 40.1 million direct
labor hours, the services' recommendations would eliminate only half
that amount.  DOD received the services' recommendations too late in
the process for meaningful give-and-take discussions to achieve
greater consolidations.  More time for such interactions and stronger
DOD leadership will be required should there be future BRAC rounds. 


      DOD COMPONENTS' PROCESSES
      WERE SOUND, WITH SOME
      EXCEPTIONS
-------------------------------------------------------- Chapter 0:4.3

While GAO found the components' processes for making their
recommendations were generally sound and well supported, it did have
some concerns.  This was particularly the case as it related to the
Air Force.  Regarding the Air Force, key aspects of its process
remained largely subjective and not well documented.  Documentation
of the Air Force's process was too limited for GAO to fully
substantiate the extent of Air Force deliberations and analyses. 

However, GAO determined that the initial analytical phases of the Air
Force process were significantly influenced by preliminary estimates
of base closure costs.  For example, some bases were removed from
initial consideration based on these estimates.  Also, in some
instances, closure costs appeared to materially affect how the bases
were valued.  For example, Rome Laboratory, in Rome, New York, was
ranked high for retention purposes largely because of projected high
closure costs.  When the Air Force later looked at the laboratory at
the suggestion of a cross-service group, it found that the closing
costs were much lower.  Consequently, the Air Force recommended
closure of the laboratory.  Without the cross-service group's
suggestion, the Air Force might have missed this opportunity to
reduce excess capacity and produce savings.  The Air Force's more
numerous recommendations on Guard and Reserve activities were
developed outside its process for grouping or tiering bases for
retention purposes, and were based largely on cost-effectiveness. 

Regarding the Navy, the Secretary of the Navy's actions excluded four
activities in California from consideration for closure because of
concerns over the loss of civilian positions.  For the activities in
California, he based his decision on the cumulative economic impact
of closures from all three BRAC rounds.  But the economic impact of
the four California activities, as defined by Office of the Secretary
of Defense (OSD) criteria, is less for individual localities than
that for similar activities recommended for closure either by the
Navy or by other DOD components.  However, OSD did not take exception
to this inconsistency. 

Regarding the Army, it did not fully adhere to its regular process
for installations in assessing military value when recommending minor
and leased facilities for closure.  In selecting 15 minor sites for
closure, the Army based its decision on the judgment of its major
commands that the sites were excess and of low military value.  In
considering leased facilities, the Army relied on its stationing
strategy and its guidance to reduce leases but did not assess the
facilities separately as it did for other installations.  The
decisions were arrived at through some departure from the process
used for installations. 


      SOME SERVICE RECOMMENDATIONS
      RAISE ISSUES THAT SHOULD BE
      CONSIDERED BY THE BRAC
      COMMISSION
-------------------------------------------------------- Chapter 0:4.4

GAO generally agrees with the Secretary's recommendations.  However,
it has specific unresolved questions about a number of Air Force
recommendations and to much less extent the other components'
recommendations.  The following are some examples. 

Even though the Air Force recognized that it had excess capacity at
its five maintenance depots and was considering closing two, it opted
late in the process to realign the workload rather than close any
depots.  However, the Air Force based its decision on preliminary
data from incomplete internal studies on the potential for
consolidating and realigning workload and reducing personnel levels
at the depots.  Some of these studies were completed after DOD's BRAC
report was published and do not fully support the BRAC-recommended
consolidations.  These recommended consolidations appear to expand
the workload at some depots that are in the process of downsizing. 
Thus, the Air Force's recommendation may not be cost-effective and
does not solve the problem of excess depot capacity. 

The Air Force also proposed the realignment of Kirtland Air Force
Base, New Mexico, because it rated low relative to the other five
bases in the same category.  Again, closure costs appeared to heavily
influence this base's rating.  However, in the military value
criterion most important to this group of bases, mission
requirements, Kirtland rated among the highest of the six bases. 
Kirtland's realignment would reduce the Air Force's operational
overhead, including support previously provided to the Department of
Energy (DOE) and its Sandia National Laboratory located on Kirtland. 
However, the Air Force's savings could mean an increase in base
operational support costs borne by DOE.  As GAO has recommended in
the past, it believes DOD should consider the impact of significant
government-wide costs in making its recommendations. 

The Army's proposed realignment of the Letterkenny Army Depot has
generated some concerns not only about the completeness of closure
cost data but also about the extent to which the current BRAC
recommendation represents a change from a 1993 BRAC decision.  BRAC
1993 produced a decision to consolidate all tactical missile
maintenance at one location--Letterkenny.  The Army's 1995 BRAC
recommendation would split up some of the work by transferring the
missile guidance system workload to Tobyhanna Army Depot while
preserving the tactical missile disassembly and storage at
Letterkenny.  Maintenance on the associated ground support equipment,
such as trucks and trailers, would be done at Anniston Army Depot. 
There are differences of opinion concerning the impact that
separating these functions would have on the concept of consolidated
maintenance. 

GAO also noted that the services considered closing a number of
bases, but ultimately rejected them for operational and cost
considerations. 


      FUTURE BRAC LEGISLATION MAY
      BE NEEDED TO REDUCE
      REMAINING EXCESS ACTIVITIES
-------------------------------------------------------- Chapter 0:4.5

According to DOD, its major domestic bases will be reduced by 21
percent after implementation of all BRAC recommendations from the
current and prior rounds; however, DOD fell short of meeting the goal
it established for BRAC 1995.  To bring DOD's base infrastructure in
line with the reductions in force structure, DOD's goal for the 1995
round was to reduce the overall DOD plant replacement value by at
least 15 percent--an amount at least equal to the three previous base
closure rounds.  However, DOD's 1995 recommended list of base
closures and realignments is projected to reduce the infrastructure
by only 7 percent. 

The Secretary of Defense recently stated that excess infrastructure
will remain after BRAC 1995, and he suggested the need for additional
BRAC rounds in 3 to 4 years, after DOD has absorbed the effects of
recommended closures and realignments.  However, the current
authority for the BRAC Commission expires with the 1995 round. 
Should the Congress seek further reductions, some process will be
needed.  The current BRAC process, while not without certain
weaknesses, has proven to be effective in reducing Defense
infrastructure.  Also, without new BRAC legislation, there is no
process to approve modifications of BRAC decisions if implementation
problems arise.  BRAC Commissions in 1991 and 1993 ruled on changes
to prior BRAC round decisions, and GAO sees nothing to indicate that
changes may not occur in the future. 


   MATTERS FOR CONGRESSIONAL
   CONSIDERATION
---------------------------------------------------------- Chapter 0:5

GAO suggests that as the Congress considers the need for future
defense infrastructure reductions, it consider a process similar to
that authorized in the 1990 BRAC legislation.  In the meantime, it
should also consider legislation to provide a process for reviewing
and approving changes to prior BRAC decisions, should DOD components
face difficulties in implementation. 


   RECOMMENDATIONS
---------------------------------------------------------- Chapter 0:6

GAO is making recommendations to the Secretaries of Defense and the
Air Force to strengthen DOD's process should there be future BRAC
rounds.  It is also making recommendations to the Base Closure and
Realignment Commission for its consideration. 


   AGENCY COMMENTS
---------------------------------------------------------- Chapter 0:7

GAO did not request written comments from the Department of Defense. 
However, GAO informally discussed its findings, conclusions, and
recommendations with DOD officials and included their comments where
appropriate. 


INTRODUCTION
============================================================ Chapter 1

In recent years, the Department of Defense (DOD) has seen substantial
reductions in its funding, personnel, and force structure, and to
less extent in its facilities infrastructure.  DOD's attempts to
close and realign military bases represent an opportunity to ensure
that scarce defense resources are devoted to the most pressing
operations and investments rather than to maintenance of unneeded
property, facilities, and overhead. 

On February 28, 1995, the Secretary of Defense announced
recommendations for closures, realignments, and other actions
affecting 146 domestic military installations.  Of that number, the
Secretary described 33 as being closures of major installations and
26 as major realignments; 27 were requested changes to prior BRAC
round decisions.  The recommendations were submitted to the Defense
Base Closure and Realignment Commission, which will consider them as
it develops its list of proposed closures and realignments for the
President and the Congress.  This year's efforts will mark the fourth
round of major base closures since 1988. 


   PREVIOUS BASE CLOSURE AND
   REALIGNMENT EFFORTS
---------------------------------------------------------- Chapter 1:1

Historically, closing unneeded facilities has not been easy,
partially because of the public's concerns about the effects of
closures on communities and their economies and about the
impartiality of the decision-making process.  Additionally, 1970s
legislation requiring congressional notification of proposed closures
and preparation of economic, environmental, and strategic consequence
reports greatly impeded base closure efforts.  Legislation enacted in
1988 (P.L.  100-526) facilitated a successful round of base closure
decision-making.  It outlined a special process for considering base
realignment and closure (BRAC) actions, authorized a special
commission to review proposed closures and realignments, and provided
relief from certain statutory provisions that hindered the base
closure process. 

In 1990, acting without use of special enabling legislation, the
Secretary of Defense found it difficult to initiate, and could not
complete, additional base realignment and closure actions.  Concerned
about the Secretary's proposals in January 1990, the Congress passed
the Defense Base Closure and Realignment Act of 1990 (Title XXIX,
P.L.  101-510), which halted any major closures unless DOD followed
the new act's requirements.  The act created the independent Defense
Base Closure and Realignment Commission; it also outlined procedures,
roles, and time lines for the President, the Congress, DOD, us, and
the Commission to follow.  It required that all bases be compared
equally against (1) selection criteria to be developed by DOD and (2)
DOD's current force structure plan.  The legislation mandated rounds
of BRAC reviews in 1991, 1993, and 1995.\1

For the 1991 and 1993 rounds under the 1990 legislation, the services
and defense agencies submitted their candidates for closure and
realignment to the Secretary of Defense for his review.  After
reviewing these candidates, the Secretary submitted his
recommendations to the BRAC Commission for its review.  The BRAC
Commission, which could add, delete, or modify the Secretary's
recommendations, then submitted its recommendations to the President
for his consideration.  The President could either accept or reject
the Commission's recommendations in their entirety; if he rejected
them, the Commission could give the President a revised list of
recommendations.  If the President accepted the Commission's
recommendations, he forwarded the list to the Congress, and the list
became final unless the Congress enacted a joint resolution
disapproving it in its entirety. 

By DOD's count, base closure rounds in 1988, 1991, and 1993 produced
decisions to fully or partially close 70 major domestic bases and
close, realign, or otherwise downsize scores of other bases,
installations, and activities.\2 The number of bases recommended for
closure or realignment in a given BRAC round is often difficult to
tabulate precisely because closure decisions are not necessarily
complete closures and closures vary in size.  The term base closure
often conjures up the image of a larger facility being closed than
may actually be the case.  Military installations are rather
diversified and can include a base, camp, post, station, yard,
center, home port, or leased facility.  Further, more than one
mission or function may be housed on a given installation.  For
example, in 1993, the Navy closed the Norfolk Naval Aviation Depot,
one of its six aircraft maintenance facilities.  The Norfolk depot
was located on the Norfolk Navy Base, which includes the Norfolk Navy
Station, Supply Center, and Air Station. 

An individual DOD base closure and realignment recommendation may
actually affect a variety of activities and functions without fully
closing an installation.  Full closures, to the extent they occur,
may involve relatively small facilities, rather than the
stereotypically large military base.  Thus, this report refers
generically to a variety of sized facilities, installations, and
activities as base closures. 

DOD is still completing the base closures and realignments approved
in 1988, 1991, and 1993.  By law, DOD must currently initiate closure
or realignment actions no later than 2 years after the President
submits his list to the Congress and must complete implementation
within 6 years.  As of January 1995, DOD data shows that 51 percent
of the 70 major closing actions of the prior three rounds had been
completed.  Bases selected for closure in BRAC 1995 must be closed by
2001. 

DOD calculated that BRAC rounds in 1988, 1991, and 1993 resulted in
decisions to close 14 percent of its major domestic bases,
representing a 15-percent reduction in plant replacement value.\3

DOD data shows that reductions in military and civilian personnel
levels during this time period have been much steeper and are slated
to reach 32 percent within the next several years.  Similarly, DOD
states that its budget request for fiscal year 1996 is, in real
terms, 39 percent below fiscal year 1985, the peak year for
inflation-adjusted budget authority in recent times.  Firm
correlations between these data sets are problematic.  Nevertheless,
differences in the extent of reductions among these categories have
been used to suggest the need for significant additional
infrastructure reductions in BRAC 1995. 


--------------------
\1 For each BRAC round, this legislation mandated that we analyze the
Secretary's selection process and recommendations, and submit a
report to the Congress and the BRAC Commission.  Depending on the
BRAC round, these reports must be completed within 30 or 45 days
after the Secretary of Defense makes public the proposed realignments
and closures.  For information on the 1991 and 1993 rounds, see: 
Military Bases:  Observations on the Analyses Supporting Proposed
Closures and Realignments (GAO/NSIAD-91-224, May 15, 1991) and
Military Bases:  Analysis of DOD's Recommendations and Selection
Process for Closures and Realignments (GAO/NSIAD-93-173, Apr.  15,
1993). 

\2 See appendix I for definitions pertaining to DOD's base
realignment and closure actions. 

\3 Plant replacement value is DOD's estimate of what it would cost to
replace all the buildings, pavements, and utilities at its bases
using today's building standards. 


   THE 1995 BASE REALIGNMENT AND
   CLOSURE ROUND
---------------------------------------------------------- Chapter 1:2

The 1995 BRAC round was subject to the same legislatively mandated
requirements and procedures enacted in 1990, and subsequently
amended, that governed BRAC rounds in 1991 and 1993.  However, for
the 1995 round, DOD also required that its components explore
opportunities for the cross-service use of common support assets. 
Thus, the Office of the Secretary of Defense (OSD) organized
cross-service review groups to propose alternatives for the
components to consider in the following five functional areas:  (1)
maintenance depots, (2) laboratories, (3) test and evaluation
facilities, (4) undergraduate pilot training, and (5) medical
treatment facilities. 

On January 7, 1994, the Deputy Secretary of Defense issued policy
guidance for the 1995 BRAC round.  He stipulated that his goal was to
further reduce the overall DOD domestic base structure by a minimum
of 15 percent of DOD-wide plant replacement value. 


      ACTIONS TAKEN TO HELP ENSURE
      THE INTEGRITY OF THE PROCESS
-------------------------------------------------------- Chapter 1:2.1

Several requirements of the BRAC process are designed to contribute
to its fairness and integrity, including the following: 

  Closure and realignment decisions must be based upon selection
     criteria and a current force structure plan (fiscal years 1996
     to 2001) developed by the Secretary of Defense. 

  All installations must be considered equally for possible closure
     or realignment. 

  All components must use specific models for assessing (1) the cost
     and savings associated with BRAC actions and (2) the potential
     economic impact on communities affected by those actions.  We
     have identified shortcomings in these models in prior BRAC
     rounds and have seen improvements made in each round to enhance
     their effectiveness. 

  Decisions to close defense facilities with authorization for at
     least 300 civilians must be made under the BRAC process. 
     Decisions to realign defense facilities authorized at least 300
     civilian that involve a reduction of more than 1,000 civilians,
     or 50 percent or more of the civilians authorized, also must
     undergo the BRAC process.  DOD components retain the option of
     including facilities/activities that fall below the threshold. 

  Information used in the BRAC decision-making process must be
     certified; that is, the information is accurate and complete to
     the best of the originator's knowledge and belief.  This
     requirement was designed to overcome concerns about the
     consistency and reliability of data used in the process. 

  DOD components must develop and implement internal control plans
     identifying how they intend to conduct their BRAC process,
     foster accurate data collection and analyses, and document
     decisions. 

  Service audit agencies and DOD Inspector General (IG) personnel
     must be extensively involved in auditing the process to better
     ensure the accuracy of data used in decision-making and enhance
     the overall integrity of the process. 


      SELECTION CRITERIA
-------------------------------------------------------- Chapter 1:2.2

DOD has used the same eight selection criteria in BRAC 1995 as it did
in the prior two rounds (see table 1.1). 



                          Table 1.1
           
             DOD Criteria for Selecting Bases for
                    Closure or Realignment

Category            Criteria
------------------  ----------------------------------------
Military value      1. Current and future mission
(priority           requirements and the impact on
consideration is    operational readiness of DOD's total
to be given to the  force.
four military
value criteria)     2. The availability and condition of
                    land, facilities, and associated
                    airspace at both the existing and
                    potential receiving locations.

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

                    4. Cost and manpower implications.

Return on           5. The extent and timing of potential
investment          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.

Impact              6. The economic impact on communities.

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

                    8. The environmental impact.
------------------------------------------------------------

      FORCE STRUCTURE PLAN
-------------------------------------------------------- Chapter 1:2.3

Decisions under each of the last three BRAC rounds have been
predicated on the most current force structure plan.  The force
structure plan for fiscal years 1995 through 2001 governs BRAC 1995. 
The planned force structure includes 10 active Army divisions, 11
Navy aircraft carriers, and 936 active Air Force fighter aircraft. 
This contrasts with the force structure in effect for BRAC 1993,
which included 12 active Army divisions, 13 Navy aircraft carriers,
and 1,098 fighter aircraft. 


   KEY STEPS IN DOD COMPONENTS'
   DECISION-MAKING
---------------------------------------------------------- Chapter 1:3

Each of the DOD components participating in BRAC 1995--including the
Air Force, Army, Navy, Defense Logistics Agency (DLA), and Defense
Investigative Service (DIS)--had its own unique organization and
process for identifying candidate bases or activities for closure and
realignment.  Yet, in varying degrees, each component incorporated
similar key steps. 


      ESTABLISHING BASE CLOSURE
      REVIEW ORGANIZATIONS
-------------------------------------------------------- Chapter 1:3.1

Each DOD component participating in BRAC 1995 was responsible for
completing a review and giving the Secretary of Defense its
candidates for base closure and realignment.  To accomplish this
objective, each component established an internal organization for
conducting the reviews.  The Air Force, Navy, and DLA had
executive-level review groups, with senior civilian and military
personnel overseeing the BRAC process.  Each organization also formed
working groups functioning under its executive review group. 
Decisions on candidate bases to be forwarded to the Secretary of
Defense were made by the respective service secretaries and agency
heads. 

The Army's principal organization for conducting its base closure
review was a working group that functioned under the direction of a
brigadier general.  Periodic briefings were provided, as needed, to
the senior Army leadership, including the Vice Chief of Staff, Chief
of Staff, and Secretary of the Army.  DIS had an executive group
composed of senior agency officials who directed the functions of
working groups under them.\4


--------------------
\4 DIS' interest in BRAC 1995 was limited to seeking a change to a
1988 BRAC Commission action that realigned Fort Holabird, Maryland,
leaving DIS as the fort's primary tenant.  During BRAC 1995, DIS
sought relocation from Fort Holabird and construction of an office
building at Fort Meade, Maryland.  Accordingly, DIS had a rather
abbreviated BRAC program and review process. 


      CATEGORIZING BASES AND
      ACTIVITIES
-------------------------------------------------------- Chapter 1:3.2

Each DOD component grouped its bases, installations, or activities
with like missions, capabilities, or attributes into categories and,
where appropriate, subcategories.  The Army and Air Force tended to
establish categories according to the type of installations and
bases.  The Navy and DLA categories were more oriented to functional
activities.  Specifically, the services and DLA grouped their
installations and bases as follows: 

  The Army had 15 categories of facilities, the major ones being
     combat maneuver installations, major training areas, command and
     control/administrative support, training schools, and ammunition
     storage facilities. 

  The Navy placed all its activities into one of five categories: 
     operational support, industrial support, technical
     centers/laboratories, educational/training, and personnel
     support/other.  Within these categories were 27 subcategories. 
     The largest category, operational support, had 12 subcategories,
     which included operational air stations, reserve air stations,
     and naval bases.  The industrial support category included
     subcategories such as shipyards and aviation depots.  Within
     these subcategories were individual Navy and Marine Corps
     installations and activities subject to review for closure or
     realignment. 

  The Air Force had seven base categories encompassing operations
     --small and large aircraft and missile bases; technical training
     and education facilities; undergraduate flying training;
     other/administrative; space operations; industrial/depot test
     facilities and laboratories; and Guard and Reserve facilities. 

  DLA had four functional categories:  command and control,
     distribution depots, inventory control points, and
     service/support activities.  Distribution depots represented the
     largest category, which was subdivided into stand-alone depots
     and specialized depots collocated with non-DLA maintenance
     depots of individual services.  Compared with the services,
     which normally own or otherwise control their bases, DLA is
     almost always a tenant on another component's facility. 


      DATA GATHERING AND ANALYSIS
      TO IDENTIFY EXCESS CAPACITY
      AND ESTABLISH MILITARY
      VALUES FOR ACTIVITIES/BASES
-------------------------------------------------------- Chapter 1:3.3

Initial steps in BRAC 1995 evaluations were to (1) determine whether
bases/facilities in categories/subcategories had excess capacity for
future requirements and (2) assess bases and facilities against the
military value selection criteria.  These were important steps toward
identifying bases/facilities/activities for further study as
potential candidates for closure or realignment. 

Data used to make these initial determinations of capacity and
military value (and satisfy data requirements for other review
criteria) were obtained by the DOD components through questionnaires,
or data calls, that went out to their activities, facilities, and
installations.  This quantifiable data was unique to each category
about facilities, missions, operations, and personnel.  Individuals
that provided this data had to certify that it was accurate and
complete. 

A starting point for assessing excess capacity was examining changes
in future years' force structure.  Beyond that, how excess capacity
was evaluated varied by and within component, depending on the type
of activity.  The Navy, for example, used personnel throughput as a
capacity indicator for its training air stations; for operational air
stations, capacity was measured by the number of air squadrons that
could be housed in terms of hangar and required support space. 
Likewise, capacity for Air Force bases with aircraft missions was
evaluated in terms of the maximum number of mission aircraft that
could be parked at the bases. 

The Army relied upon measures besides quantifiable data to assess
excess capacity.  Guidance and insights on potential excess capacity
were derived from a study entitled "The Army Stationing Strategy."
This study, produced by the Deputy Chief of Staff for Operations and
Plans at the outset of the 1995 BRAC review process, served as a
frame of reference, or operational blueprint, for the Army's BRAC
review process.  Drawing on input from senior leaders in the Army,
this study provided operational insights and military judgments
regarding each category of Army base/facility, including possible
operational requirements and opportunities to reduce infrastructure. 
For example, the study cited the need to maintain the capability to
station 10 division equivalents plus 2 armored cavalry regiments in
the United States--the equivalent of 32 maneuver brigades.  This
requirement was predicated on the Army's force structure remaining as
it is now and included contingency planning for stationing all Army
forces in the United States.  The study estimated that the Army could
now house 29 brigades in the United States without any new
construction; with military construction, it could increase its
capacity to station 38 brigades.  This stationing strategy formed the
basis for military value assessments and was used to identify a list
of installations to be studied closer for closure or realignment. 

Key measures of capacity for DLA were the amount of physical space
and throughput capacity available and used.  Although it depended on
data calls for information about storage capacity, DLA's BRAC review
also used as a frame of reference "concepts of operation" for each of
its organizational categories to guide decision-making.  Examples of
concepts of operations were increased emphasis on modern means to
eliminate old, excess items; less reliance on item stockage in
government depots; and greater reliance on industry delivery systems
for direct delivery to military customers. 

Each component developed a unique analytical approach to using DOD's
military value criteria to analyze, rank, or tier facilities within
its categories.  Data call responses were keyed to the selection
criteria.  Data calls were designed to permit comparisons among
installations and activities.  The components assigned values to
particular data call items based on their importance to the
individual elements of military value.  Subsequently, ranked or
tiered installations and activities were used as a frame of reference
by most components in selecting specific installations and activities
for further assessment in terms of potential closing or realignment
action.  Thus, the ranking or tiering of installations was viewed
more as the beginning of the deliberative process, rather than the
end of it. 


      IDENTIFYING POTENTIAL
      REALIGNMENT AND CLOSURE
      CANDIDATES AND ANALYZING
      SCENARIOS
-------------------------------------------------------- Chapter 1:3.4

After DOD components identified candidates for further study, they
examined the feasibility of various realignment and closure
scenarios.  For a component with primarily one
function/activity/mission at a given base or facility, scenarios
focused on options for eliminating or relocating that single function
or mission.  The potential for closing these bases was more apparent. 
Components with BRAC categories more aligned to functions than to
bases could make decisions affecting several functions on a given
installation before their cumulative effect provided the potential
for a base closure or major realignment. 

Most components relied on their staffs' technical expertise and
professional judgment in identifying various alternative scenarios. 
For example, because several of DLA's activities were collocated with
service activities or closely tied to service operations, DLA
coordinated with the services in developing its scenarios.  DLA
considered several factors, such as the services' force structure
changes, base closure or realignment plans, and projected workload
estimates. 

The Navy was the only service to use a computer program to configure
requirements to existing capacity in each of its basing categories as
a starting point for deliberation on closure/realignment scenarios. 
The program was designed to find a set of activities in a subcategory
that achieved a reduction of excess capacity to varying degrees.  The
Navy also had the unique goal of maintaining an average military
value at least as high as that calculated for all activities in a
subcategory.  Thus, it was possible to recommend some bases with
higher military value for closure while leaving others open. 

The services' identification of scenarios was complemented by
alternatives given to them for their consideration by cross-service
working groups.  Appendix II provides a more complete description of
the cross-service working groups' analytical processes. 


      GAUGING POTENTIAL COSTS AND
      SAVINGS FOR VARIOUS
      SCENARIOS
-------------------------------------------------------- Chapter 1:3.5

Important aspects of the scenarios to evaluate were the costs,
savings, and payback periods associated with them.  Each component
assessed costs using the Cost of Base Realignment Actions (COBRA)
model.  This model has been used in each of the BRAC rounds, and
improvements were made after each successive round to overcome
identified limitations.  Appendix III summarizes improvements that
have been made to the COBRA model. 


      DETERMINING COMMUNITY,
      ENVIRONMENTAL, AND ECONOMIC
      IMPACTS
-------------------------------------------------------- Chapter 1:3.6

Although OSD policy guidance specifies that priority consideration be
given to military value, economic, community, and environmental
impact issues were also factors in the process.  For installations
that would inherit additional missions, functions, or personnel as a
result of BRAC actions, the component assessed the impact on
surrounding communities' infrastructures, including housing, public
utilities, transportation, and recreational facilities. 

Under OSD policy guidance, environmental restoration costs were not
considered in base closing decisions, since DOD is obligated to
restore contaminated sites on military bases regardless of whether
they are closed.  Yet consideration was given to the impact of BRAC
actions on such environmental issues as threatened or endangered
species, wetlands, flood plains, water supplies, and air quality. 
Air quality issues played a larger role in BRAC 1995 than they did in
previous BRAC rounds because implementing regulations for the Clean
Air Act of 1990 were developed after BRAC 1993.  As a result, the
components, particularly the Air Force, took a harder look at air
quality issues in evaluating their bases in BRAC 1995. 

With succeeding BRAC rounds and the cumulative effect of closures and
realignments on particular regions, the issue of economic impact on
communities has grown in importance.  The economic impact was
calculated by measuring the direct and indirect effects on employment
in the communities affected by a closure or realignment.  DOD
components calculated the economic impact of each of their
recommendations and the cumulative impact of recommendations from
this and prior BRAC rounds on individual areas of the United States. 
Such assessments could, although they did not in the past, provide
the basis for the components to consider alternative closures and
realignments.  Once OSD had compiled BRAC recommendations from all of
its components, it likewise made a collective assessment of economic
impact.  This provided the basis for determining whether final
adjustments in proposed realignments and closures were needed before
the Secretary submitted his recommendations to the BRAC Commission. 
Appendix V provides a more complete description of how economic
impact was assessed and the changes made to improve this assessment
for BRAC 1995.  Despite initial expectations that economic impact
assessments would play a larger role in BRAC for 1995 than it had in
prior rounds, this did not turn out to be the case, with the
exception of actions by the Secretary of the Navy to exclude some
bases from closure consideration due to the cumulative effects of
prior BRAC rounds (see
ch.  6). 


   MILITARY JUDGMENT, INCLUDING
   OPERATIONAL AND POLICY
   CONSIDERATIONS, AFFECTS
   ULTIMATE CLOSURE AND
   REALIGNMENT DECISIONS
---------------------------------------------------------- Chapter 1:4

Although each DOD component goes through a phased and largely
quantified process in evaluating its facilities and installations,
final closure and realignment decisions are often influenced by
military judgments, operational and policy imperatives, and other
factors.  These are important parts of the BRAC process.  Such
factors may include a service's decision to maintain certain
capabilities on both the east and west coasts, or to maintain a
facility having relatively low military value because of its
strategic location and importance. 

Military judgment and other policy factors are applied at various
points throughout the evaluation process to eliminate facilities and
installations from further consideration for closure or realignment. 
To some extent they may also be applied by a service secretary before
forwarding candidates to the Secretary of Defense.  Likewise, OSD,
the Joint Chiefs of Staff, and the war-fighting Commanders-in-Chief
also review proposed base closures and realignments, applying their
military judgment as a final check on proposed recommendations. 


   BASES RECOMMENDED FOR CLOSURE
   AND REALIGNMENT IN BRAC 1995
---------------------------------------------------------- Chapter 1:5

After reviewing a consolidated list of recommendations for closures
and realignments from the services and Defense agencies, and without
making any changes, the Secretary of Defense publicly announced his
list of recommendations on February 28, 1995.  The Secretary
recommended closures, realignments, and other actions affecting 146
domestic military installations.  Of that number, the Secretary
described 33 as being closures of major installations and 26 as major
realignments, and 27 involve requests to change (redirect) prior BRAC
decisions (see app.  IV). 

DOD projects that its 1995 BRAC recommendations, if approved, will
produce a 6-year net savings of $4.0 billion, with annual recurring
savings of $1.8 billion after implementing actions are completed. 


   OBJECTIVES, SCOPE, AND
   METHODOLOGY
---------------------------------------------------------- Chapter 1:6

The Defense Base Closure and Realignment Act of 1990, as amended,
requires that we provide to the BRAC Commission and the Congress a
detailed analysis of the Secretary of Defense's recommendations and
selection process.  Accordingly, from March 8, 1994, to February 28,
1995, we monitored the process as it was being implemented by DOD
components.  We analyzed the Secretary's recommendations and further
analyzed the process between March 1 and April 10, 1995. 

DOD and its components granted us varying degrees of access.  For
example, DLA allowed us to monitor all phases of its decision-making
process, including all executive-level sessions at which BRAC issues
were being discussed and decisions made.  At the other extreme, the
Air Force gave us very limited direct access to its process until
after the Secretary of Defense announced her recommendations on
February 28, 1995.  This limited our ability to fully assess the Air
Force's process. 

We did our work at OSD, the military services' and defense agencies'
headquarters and field locations, and various military commands and
installations.  We interviewed and obtained pertinent documentation
from officials at these locations.  At OSD, we obtained information
about policy guidance provided to DOD components and OSD's oversight
role in the base closure and realignment process.  We also
interviewed and obtained pertinent documentation from officials
involved in the cross-service working groups. 

For each of the services, DLA, and DIS, we reviewed documentation and
interviewed officials to determine whether their decision-making
processes complied with legislative requirements and OSD guidance and
employed sound methodologies and techniques.  We broadly examined
categories of bases and individual decisions within those categories
to determine whether recommended closures and realignments logically
flowed from available documentation and decision-making processes. 
For major recommendations, we tracked the recommendation in detail
through the decision-making process to test the decision logic,
consistency, reasonableness, and correlation with military value
assessments and other decision criteria.  We applied the same
approach to examine alternatives suggested to the services by the
five functional cross-service groups. 

If the services used special cost or analytical models, we reviewed
them to understand how they fit into the analytical process and
examined technical documentation to ensure that these tools were
appropriate for their use.  We also independently examined the
outputs of these models, particularly COBRA.  Any errors we detected,
such as in cost data, were immediately referred to DOD components for
their consideration.  In most instances, service audit agencies and
the DOD IG made more in-depth assessments of these models and
verified data entries and output pertaining to these models; they
also referred errors to the components on a real-time basis to ensure
needed corrections were made.  In most situations, we reviewed and
assessed the results of the audit agencies' work; in selected
instances, we observed the work of the audit agencies in making their
assessments. 

Each of the DOD components used its respective audit agency to
provide real-time audit coverage of data collection and analyses
processes to ensure that the data used were adequately documented and
accurately incorporated in the process.  Therefore, we maintained a
liaison with these groups to facilitate our monitoring efforts and in
selected instances observed their verification of data. 

We performed our work in accordance with generally accepted
government auditing standards.  We did not request written comments
from DOD, but we informally discussed our findings, conclusions, and
recommendations with DOD officials and included their comments where
appropriate. 


BRAC 1995 SAVINGS ARE EXPECTED TO
BE SUBSTANTIAL, ALTHOUGH SOMEWHAT
IMPRECISE FOR NOW
============================================================ Chapter 2

Although projected annual recurring savings from DOD's BRAC 1995
recommendations are substantial, various sensitivity tests we
completed indicated they could be overstated by 2 percent, and
implementation costs could be understated by 4 percent.  At the same
time, the cost and savings data remain somewhat imprecise pending
development of budget quality data for implementation of the
recommendations. 

The COBRA model is used by DOD components to estimate the costs and
savings of base closures and realignments.  Improvements have been
made to the model after each BRAC round; however, it remains more of
a comparative tool rather than a precise indicator of budget costs
and savings.  DOD has employed a different, but appropriate, discount
rate approach for BRAC 1995 than was used in earlier BRAC rounds to
project the net present value (NPV) of long-term savings.  Recent
changes in the actual discount rate for this approach, and DOD's
reaction to that change, have created some confusion regarding the
extent of long-term savings. 


   COST OF BASE REALIGNMENT
   ACTIONS MODEL
---------------------------------------------------------- Chapter 2:1

The COBRA model estimates the costs and savings associated with a
proposed base closure and realignment action, using data that are
readily available to DOD without extensive field studies.  COBRA
incorporates data pertaining to three major costs:  the current cost
of operations, the cost of operations after the closure or
realignment, and the cost of implementing the realignment or closure
action.  Using these costs, COBRA calculates the number of years it
takes to generate enough savings to offset the cost of the closure or
realignment.  Stated another way, it determines how long it takes for
the closure or realignment action to be paid for. 

COBRA computes the NPV of the BRAC action over a 20-year period, as
well as one-time costs, 6-year costs and savings, and annual
recurring costs and savings.  COBRA data depict costs as accurately
as possible; however, when uncertainty exists, COBRA inputs have
tended to overestimate costs and underestimate savings as a
conservative safeguard to guide decision-making.\1

While COBRA does not produce budget-quality data, it does aggregate
relevant cost data to provide a consistent comparison between
realignment and closure options. 


--------------------
\1 Environmental cleanup costs, which by OSD policy direction are not
included in COBRA calculations.  These costs are not a part of
base-closing decisions, since they are expected to occur whether a
base closes or not. 


   SUBSTANTIAL SAVINGS ARE
   EXPECTED, DESPITE SOME ERRORS
   AND UNCERTAINTIES
---------------------------------------------------------- Chapter 2:2

In several instances, variances may exist in cost and savings
estimates for BRAC 1995 recommendations.  In other instances, cost
and savings estimates remain uncertain.  However, assuming the
Commission approves all recommendations as presented, our analysis
indicates that these variances would not significantly alter the
substantial savings expected from the BRAC recommendations. 

A DOD IG review completed and made public after DOD's BRAC report,
including COBRA summaries, showed that several of OSD's standard cost
factors supplied for the components' use either were not well
supported or were outdated.  These standard factors related to
civilian personnel and housing costs.  As a result of using these
faulty standard factors, one-time costs were understated by $101
million, and in at least two instances, one-time costs increased
enough to extend the return on investment (ROI) an additional year. 
However, our analysis also indicated the use of faulty factors caused
a reduction in net present value only by approximately $68 million. 

Questions have been raised about the accuracy of OSD's standard
factors regarding (1) the willingness of civilian employees to
relocate if their positions are moved to a new base and (2) the
percentage of civilian personnel who would receive other government
jobs as a result of the Priority Placement Program. 

OSD's standard factor of 6 percent of civilian personnel that would
be unwilling to move was based on a 1991 study of one air base. 
Because of concern that the percentage could be much higher, we
completed a sensitivity analysis, assuming that more than two-thirds
of affected civilian personnel would be unwilling to move.  Our
analysis showed a net result of less than a 1-percent change in
one-time costs.  Increased costs associated with separation of
persons unwilling to move was largely offset by decreased costs
associated with moving personnel. 

The standard factor of 60 percent placement of civilian personnel
through the Priority Placement Program (used in all of DOD's COBRAs)
was challenged by the DOD IG and subsequently revised by OSD to 50
percent based on historical data.  In spite of the reduction, concern
remained that the percentage could be much lower.  To test the impact
of this factor on overall cost, we reran the COBRAs using a
20-percent placement rate.  The result was a slight increase (2
percent) in one-time costs, due to a rise in severance pay that was
mitigated by a decrease in moving costs. 

COBRA uses authorized personnel positions for analysis; however, we
found that the actual number of civilian personnel at a base may be
less.  To determine the impact of this difference, we completed a
sensitivity analysis, assuming that the actual civilian personnel
levels were 98 percent of what was authorized (an approximation based
on differences in recent fiscal years).  The results indicated that
one-time costs decreased by $17 million, with a 6-year net increase
in savings of $27.7 million.  This appeared to be caused by (1)
reduced moving costs because fewer positions were being realigned and
(2) greater overhead savings. 

DOD's BRAC policy guidance stipulates that personnel reductions
associated with force structure reductions are not to be included in
BRAC savings.  Other military personnel reductions occurring at bases
slated for closure or realignment may be counted as savings to the
extent that they represent reductions in salary costs.  While such
reductions are taken, they may not always result in reductions in
authorized end strength.  The Navy and the Air Force indicate that
they reduce their end strengths to match military personnel
reductions resulting from BRAC; the Army, which is claiming savings
from such reductions in BRAC 1995, indicates that it does not expect
to take commensurate reductions in end strength.  We calculate that
approximately $41 million of the Army's annual recurring BRAC savings
is related to such personnel reductions.  Since these personnel will
be reassigned elsewhere rather than taken out of the force structure,
they do not represent dollar savings that can be readily allocated
outside the personnel accounts. 

We also found that DOD components were not always able to identify
where activities from closing or realigning bases would relocate. 
Therefore, to fully capture costs and savings, a generic "base X" was
used.\2

Collectively, the services and DLA included base X in 32 (22 percent)
of their BRAC 1995 recommendations, accounting for 12 percent of all
personnel realignments and 3 percent of costs.  Further, in 15 of
these 32 recommendations, more than half of the personnel
realignments were to base X.  Because base X represents an average
cost option, or in the case of the Navy and Air Force a higher than
average cost option, the difference between the COBRA cost estimate
and the eventual implementation cost could be more or less for these
recommendations.  The components with the greatest number of base-X
recommendations were the Army and DLA.  Army and DLA officials
indicated that prior BRAC experience has shown that costs associated
with such moves have been similar or less than initially projected. 

The net result of various sensitivity tests we completed showed that
DOD's projected $1.8 billion annual recurring savings from BRAC 1995
recommendations could be overstated by $31 million, or 2 percent, and
the cost to implement the recommendations could be understated by
$160 million, or 4 percent.  This represents a relatively limited
diminution in projected cost savings. 

It should be noted, however, that most DOD components undertake more
rigorous assessments of expected costs very quickly after the
Secretary of Defense announces his list of proposed closures and
realignments, as they begin to more fully consider how to implement
the recommendations and develop budget quality data for doing so. 
Such efforts are currently underway, primarily in the Army and Air
Force, and to a lesser extent in the Navy.  A more current estimate
of projected costs and savings should be available before the
Commission completes its work and issues its report to the President. 


--------------------
\2 For anticipated relocations of less than 50 miles, a generic "base
Y" was used.  Relocations to base Y, as for actual relocations less
than 50 miles, do not include personnel moving costs. 


   COMPARABILITY OF COBRA DATA AND
   IMPLEMENTING BUDGET ESTIMATES
---------------------------------------------------------- Chapter 2:3

Various concerns have been voiced about the comparability of prior
BRAC COBRA data and subsequent budget estimates prepared to implement
BRAC decisions, and the same concerns pertain to the 1995 BRAC round. 
It is important to note that COBRA is only a starting point for
preparing BRAC implementation budgets, and there are important
differences in how cost data is developed for COBRA and for
subsequent budget submissions.  Thus, no services or defense agencies
routinely compare COBRA estimates with implementing budgets.  At the
same time, the services and defense agencies do not update their
initial estimates of BRAC savings once implementing budgets are
completed. 

Differences between COBRA estimates and the BRAC budget exist for
myriad reasons, including the following: 

  COBRA estimates, particularly those based on standard cost factors,
     are averages.  Not surprisingly, those averages must be refined
     for budget purposes. 

  COBRA costs are expressed in constant-year dollars; budgets are
     expressed in then-year (inflated) dollars. 

  COBRA costs can be understated if a closing base has several tenant
     organizations that must be relocated.  Understatement has
     occurred in the past where decisions had not been finalized when
     the COBRA costs were estimated. 

  Environmental restoration costs are not included in COBRA, but
     these costs are included in the BRAC implementation budgets. 

  COBRA data capture costs and savings pertinent to a given
     installation, even if multiple tenants are involved; BRAC
     implementation budgets represent only a single component's
     costs. 

  Homeowners Assistance Program costs are included in COBRA but
     excluded from BRAC implementation budgets. 

While COBRA and budget data are not routinely compared across the
board, some ad hoc assessments have shown that budgeted costs related
to COBRA cost factors were less than originally projected by COBRA or
even initial budget estimates.  For example, the Army has found over
time that actual BRAC-related personnel costs were less than
initially forecast.  Also, the DOD IG has done a series of audits
comparing most recent budget requests for BRAC construction with the
COBRA estimates for 38 affected bases.  It found that the budget
requests, on average, were 7.79 percent ($170.5 million) less than
original estimates. 

To the extent that implementation costs are less than those projected
by COBRA, BRAC savings can obviously be greater than initially
projected.  However, as indicated previously, DOD and its components
do not routinely update their initial savings estimates.  In another
review, we are examining the extent to which actual cost savings vary
from initial estimates of prior BRAC closures and realignments. 


   BRAC 1995 USED A DIFFERENT
   DISCOUNT RATE APPROACH TO
   CALCULATE LONG-TERM SAVINGS
---------------------------------------------------------- Chapter 2:4

All BRAC 1995 COBRA costs and savings are projected over a 20-year
period and are adjusted, or discounted, to fiscal year 1996 dollars. 
COBRA uses a discount rate to calculate the present value of net
savings over the 20-year period.  Discounting reflects the time value
of money by transforming gains and losses from different time periods
to a common unit of measurement.  The discount rate is also used as a
factor in determining the number of years before the government
realizes a return on its ROI, that is, the point at which savings
begin to exceed costs associated with the closure or realignment
action. 

Office of Management and Budget (OMB) Circular A-94, "Guidelines and
Discount Rates for Benefit-Cost Analysis of Federal Programs,"
provides guidance on the discount rates to be used in evaluating
federal programs whose benefits and costs are distributed over time. 
In prior BRAC rounds, the discount rate approach used was one that
OMB said approximated the rate of return on private capital. 
According to OMB, that approach is appropriate for analyzing public
investments and regulatory programs that provide costs and savings to
the general public, such as building a dam.  Because the benefits of
such programs occur in the private sector, the government's ROI is
comparable to the rate of return expected in the private sector.  The
discount rates for this approach as used in BRAC 1991 and 1993 were
10 percent and 7 percent, respectively, for 20-year programs.  Had
this approach been used in BRAC 1995, the applicable discount rate
would have remained at 7 percent. 

OSD opted to use a different discount rate approach for BRAC 1995. 
After consulting with OMB, OSD elected to use a discount approach
tied to the U.S.  Treasury's borrowing rate.\3 That approach is
considered appropriate for analyzing programs where a given objective
is to be achieved at the least cost.  An example of a program for
which the use of this discount approach is applicable is an
investment in an energy-efficient building system that reduces
federal operating costs.  At the time most BRAC 1995 COBRA analyses
were done, the discount rate for this approach was 2.75 percent for
20-year programs--this rate was used by the services in completing
their COBRA analyses.\4

However, on February 7, 1995, OMB completed its annual reassessment
of the rate and changed it to 4.85 percent.\5 OSD did not revise its
COBRA assessments to reflect this higher rate. 

Although OMB officials approved of DOD's shift in the discount rate
methodology for BRAC 1995, they acknowledge that economists have
reached no consensus on a single conceptual approach for such
analyses.  It should be noted, however, that the use of a discount
rate tied to the Treasury's borrowing rate is consistent with our
approach in evaluating benefits and costs of public policies over
time.  Thus, we believe DOD's use of this approach is appropriate for
BRAC. 

What is the practical impact of changing discount rate approaches on
expected BRAC costs and savings?  In general, for base closures with
closing costs concentrated in the early years and savings occurring
later, the lower the discount rate, the greater the net present value
of savings and the shorter the time period before net savings begin
to accrue.  To more precisely determine the impact of different
discount rates on expected BRAC net present value savings, we reran
the COBRA model for BRAC 1995 recommendations using 7 percent, 4.85
percent, 4.2 percent, and 2.75 percent discount rates (see table
2.1). 



                          Table 2.1
           
           Impact of Various Discount Rates on BRAC
                   1995 Net Present Values

            (Fiscal year 1996 dollars in millions)

                   2.75-        4.2-       4.85-
DOD              percent     percent     percent   7-percent
component       discount    discount    discount    discount
------------  ----------  ----------  ----------  ----------
Army            $8,184.2    $6,945.2    $6,463.9    $5,134.1
Navy             8,528.0     7,457.0     7,039.2     5,878.4
Air Force        3,656.1     3,056.7     2,824.6     2,186.4
DLA              1,276.7     1,077.7     1,000.6       788.4
DIS                  4.2         3.4         3.1         2.2
============================================================
Total          $21,649.2   $18,540.1   $17,331.4   $13,989.6
------------------------------------------------------------
Note:  Totals may not add due to rounding. 

In recalculating COBRA estimates, we also sought to determine when
the DOD components would receive a return on their investments, using
a 2.75-percent and a 4.85-percent discount rate.  In most cases, we
found no appreciable difference, although in several instances (11
percent) the ROI years increased by 1 year to 2 years under the
higher discount rate. 


--------------------
\3 OMB first authorized government agencies to use this discount rate
in October 1992.  This rate is updated each year with the President's
budget submission. 

\4 In subsequent chapters dealing with individual DOD components'
recommendations and other bases they considered for closure, we also
used the 2.75-percent rate to show NPV, since that rate was used in
their decision-making. 

\5 In its report to the Commission, OSD inadvertently summarized its
BRAC 1995 cost data using a discount rate of 4.2 percent rather than
4.85 percent.  It used the 2.75-percent rate for reporting specific
recommendations. 


   A SHORT-TERM VIEW OF SAVINGS
   WITHOUT USING A DISCOUNT RATE
---------------------------------------------------------- Chapter 2:5

Another perspective on expected savings from BRAC 1995 base closures,
realignments, and redirects, without including the impact of a
discount rate, is seen in the costs and savings expected during the
6-year implementation period and in the projected recurring annual
savings after the 6-year implementation period.  Table 2.2 summarizes
those projected costs and savings. 



                          Table 2.2
           
           Projected 6-year Costs and Savings From
                          BRAC 1995

            (Fiscal year 1996 dollars in millions)

                                                   Recurring
                                                      annual
DOD               6-year      6-year  6-year net         net
component          costs     savings     savings   savings\a
------------  ----------  ----------  ----------  ----------
Army            $1,594.2    $2,796.0    $1,201.8      $725.1
Navy             1,729.5     4,501.8     2,772.3       605.3
Air Force        1,392.7     1,505.3       112.6       363.3
DLA                464.2       577.2       113.0       119.6
DIS                 12.8        12.3        (.5)          .5
============================================================
Total           $5,193.4    $9,392.7    $4,199.3    $1,813.8
------------------------------------------------------------
Note:  Totals may not add due to rounding. 

\a Recurring annual net savings begin after BRAC recommendations have
been implemented. 


   ENVIRONMENTAL CLEANUP COSTS ARE
   NOT CONSIDERED IN MAKING
   CLOSURE DECISIONS
---------------------------------------------------------- Chapter 2:6

Environmental restoration was not a factor in the DOD base closure
decision-making process; however, it can represent a significant cost
following a base closure.  The Comprehensive Environmental Response,
Compensation and Liability Act (CERCLA) of 1980 (P.L.  96-510) and
the Superfund Amendments and Reauthorization Act of 1986 (P.L. 
99-499) require the Department to restore contaminated sites on
military bases, whether the bases are closing or not.  Environmental
cleanup costs, however, are likely to have a significant budgetary
impact since pressure for rapid conversion and reutilization of
closed bases will not allow these costs to be spread over many years. 

For the 123 bases affected by the 1988, 1991, and 1993 closure
actions, the estimated cleanup costs contained in the 1995 BRAC
budget justification document will be about $4 billion.  For the 33
major bases proposed for closure by BRAC 1995, the estimated cleanup
costs contained in the Defense Environmental Cleanup Program Annual
Report to Congress for Fiscal Year 1994 (Mar.  31, 1995) are about $2
billion.\6 For the cleanup of minor bases, for which DOD provided
data, the cost estimate was $147.3 million. 

The cost estimates are only preliminary ones because (1) detailed
environmental surveys for BRAC 1995 bases have not been done to
reflect shorter time frames to accomplish restoration and expedite
the transfer of property following a base closure, (2) CERCLA cleanup
studies have not been done, (3) the amount and types of contaminants
to be cleaned up are unknown, (4) changes in requirements are being
issued often, and (5) technology improvements could decrease costs. 
As shown in our report entitled Military Bases:  Environmental Impact
at Closing Installations (GAO/NSIAD-95-70, Feb.  23, 1995), past
cleanup cost estimates have proven to be low.  For the 84 bases
included in earlier BRAC rounds, where additional information was
supplied in April 1994, the cost to clean up these bases rose to $5.4
billion, or over $1.6 billion more than the total estimate for these
same bases in the fiscal year 1995 budget request. 

It is too early to assess what impact environmental cleanup will have
on the timely disposal of properties, since most of them have not
closed. 


--------------------
\6 DOD has not completed the cost estimate for the accelerated
cleanup of the BRAC 1995 bases. 


   CONCLUSIONS AND RECOMMENDATION
---------------------------------------------------------- Chapter 2:7

Projected savings from BRAC 1995 recommendations are expected to be
substantial, despite some potential areas of overstatement.  At the
same time, COBRA estimates included in the Secretary of Defense's
report to the Commission are recognized as somewhat imprecise. 
Currently, some DOD components are working to obtain more complete
cost data.  Accordingly, we recommend that the Commission consider
obtaining updated cost and savings data to the extent it is available
and include this data in summary form in its report for the
recommendations it forwards to the President for his consideration. 


OSD ATTEMPTED TO PLAY A STRONGER
ROLE IN BRAC 1995, WITH LIMITED
SUCCESS IN CROSS-SERVICING
============================================================ Chapter 3

OSD took actions to improve its oversight of the BRAC 1995 process. 
It also sought to encourage the consolidation of workloads across the
services and thereby reduce DOD-wide capacity for performing five
common support functions.  Based on the services' recommendations,
some reductions in excess capacity would be achieved within the
services, but the services' recommendations for closures and
realignments would move very little work from one service's
facilities to another's.  OSD's efforts to encourage the services to
share assets, consolidate workloads, and reduce capacity in the five
functions were limited because of reliance on service decision-making
and consensus; insufficient time; and, in some cases, a narrow
analytical approach. 


   OSD ESTABLISHED OVERSIGHT AND
   CROSS-SERVICE GROUPS
---------------------------------------------------------- Chapter 3:1

In prior BRAC rounds, OSD involvement was generally limited to
issuing guidance and reviewing the services' recommendations just
before the Secretary forwarded them to the Commission.  For BRAC
1995, OSD continued its policy guidance role but also established a
senior-level review group to oversee the entire BRAC process and a
steering group to support it.  These two groups brought key senior
OSD officials into the BRAC process for the first time in a
substantive way.  The review group was chaired by the Deputy
Secretary of Defense; the secretaries or under secretaries of the
services, chairpersons of the cross-service groups, and others were
members.  The group met six times between January 1994 and February
1995. 

The review group was authorized to review BRAC 1995 policies,
procedures, and excess capacity analyses; establish closure or
realignment alternatives, numerical excess capacity analyses, and
reduction targets for DOD components; review BRAC 1995 work products
of the DOD components and cross-service groups; and make
recommendations to the Secretary of Defense regarding cross-service
trade-offs and asset-sharing opportunities. 

The BRAC 1995 steering group assisted the review group.  It was
chaired by the Assistant Secretary of Defense for Economic Security;
the team leaders of each joint cross-service group, service
representatives, and others were members.  The steering group met 10
times between January and August 1994. 

Between January and November 1994, the periodic meetings of the
review and steering groups helped focus the attention of senior DOD
officials on the potential for cross-servicing and facilitated the
cross-service groups' process.  In November and December 1994, each
cross-service group sent one or more sets of alternatives (proposals
for closures, realignments, and workload consolidations) to the
services for their consideration in making their final
recommendations.  After this point, the review group met one more
time to endorse, without changes, the services' recommendations to
the Secretary of Defense. 

We did not attend the review, steering, and cross-service groups'
meetings.  However, we reviewed the minutes of their meetings and
interviewed OSD and service officials who led and worked with each of
the groups, DOD IG officials who attended the meetings of each group,
and service audit officials who verified the data submitted to the
groups.  We observed service auditors verifing data collected at
several activities and DOD IG auditors verifing data consolidation,
analyses, and calculations for each of the cross-service groups.  We
assured ourselves that data discrepancies were identified and
corrected.  In March and April 1995, we analyzed how the
cross-service groups calculated excess capacity and developed the
proposals they sent to the services.  We also evaluated the services'
response to the cross-service groups and their recommendations for
closures and realignments. 


      THE TIMING OF THE
      CROSS-SERVICE PROCESS
      LIMITED ITS IMPACT ON OSD
      AND SERVICE DECISIONS
-------------------------------------------------------- Chapter 3:1.1

The cross-service group process began in January 1994.  In March and
April 1994, the cross-service groups sent their data calls to the
services, after the services had sent their own data calls to the
field activities.  In July and August 1994, the steering group
approved the plans the groups proposed for analyzing the data they
had requested.  The groups identified amounts of excess capacity, but
except for depot maintenance, they did not set capacity reduction
goals, as originally envisioned.  In late 1994, the groups sent their
proposals to the services that were responsible for considering the
cross-service alternatives in their service decisions.  Subsequently,
OSD received the services' recommendations too late in the process
for meaningful give-and-take discussions to achieve greater
consolidations.  Had the cross-service groups started earlier, they
might have had more fully developed proposals and greater influence
on the services' and the Secretary of Defense's recommendations for
closures and realignments. 

DOD officials told us that, ideally, the groups should have decided
how they would use the information they requested before asking the
questions.  This would have avoided needless work on the part of the
responding activities.  Also, this would have given the groups more
time at the end of the process to formulate their proposals to the
services.  In addition, if OSD had established capacity reduction
goals for each function early in the process, the services might have
more carefully considered the interservicing opportunities that the
groups identified. 

As it was, despite the efforts of the review and steering groups,
milestones slipped repeatedly throughout the process.  When the
groups sent their proposals to the services in late 1994, the
services were already completing their analyses of their own
installations.  Consequently, little time remained for the review
group to work with the services on additional opportunities for
cross-service trade-offs and asset-sharing. 


   SERVICES' RECOMMENDATIONS WILL
   REDUCE SOME INFRASTRUCTURE, BUT
   FEW WORKLOADS WILL BE
   CROSS-SERVICED
---------------------------------------------------------- Chapter 3:2

In prior BRAC rounds, each service's base closure and realignment
process and recommendations focused almost exclusively on its
activities.  They did not consider the potential for consolidating
work across service lines.  Recognizing this potential, the Secretary
of Defense designated five common support functions as areas of
special attention in BRAC 1995 and established joint cross-service
groups to deal with them.  The functions were depot maintenance, test
and evaluation, laboratories, medical treatment facilities, and
undergraduate pilot training.  Appendix II discusses the structure of
and analytical process used by these groups. 

Among other things, the groups computed the capacity of each site
performing a specific function.  Then they compared the cumulative
capacity of all sites with the workload projected for a given year to
determine the amount of excess capacity in each area.  Table 3.1
shows how much excess capacity each group identified. 



                          Table 3.1
           
           Amount of Excess Capacity Identified by
                   Each Cross-Service Group

Cross-service
group               Amount of excess capacity
------------------  ----------------------------------------
Depot maintenance   40.1 million direct labor hours (equal
                    to 24,830 work years\a)

Test and            495,000 test hours
evaluation

Laboratories        9,800 work years

Medical treatment   1 medical center is excess, and 2
facilities          medical centers and 13 hospitals should
                    be realigned.

Undergraduate       33 percent of available airfield
pilot training      operations for fixed-wing aircraft and
                    108 percent of available ramp space for
                    rotary-wing aircraft
------------------------------------------------------------
\a Direct labor hours as a measure of capacity represents the amount
of workload a facility can accommodate with all work stations manned,
on a single shift, 5-day, 40-hour week. 

Early in the process, DOD officials debated the role of the
cross-service groups.  The Vice Chairman, Joint Chiefs of Staff,
advocated a strong role for these groups and recommended that the
services be required to incorporate the groups' alternatives in their
final recommendations.  Other officials believed the services had to
retain the final say on closures and realignments to meet their Title
10 responsibilities.\1 The latter view prevailed.  This key decision
meant that cross-service groups were subordinate to the services.  In
other words, the services retained the power to make the final
recommendations for closures and realignments of their activities. 

The cross-service groups' perspective on the activities they studied
differed from that of the services.  They looked only at functions
performed at two or more sites, or by two or more services, and those
with the potential for being consolidated.  In most cases, these
functions represented only a portion of what was done at a specific
site.  Furthermore, the activity was usually only part of a base or
installation.  The services had the broader perspective of the entire
base and its future needs.  In addition, the cross-service groups did
not calculate the ROI of the closures, realignments, and workload
consolidations they proposed to the services.  Using these factors,
the services determined whether the groups' proposals were feasible
and cost-effective.  Finally, the groups' proposals were not
definitive; four of the groups proposed two or more sets of
alternatives.  In effect, the groups said that given the magnitude of
excess capacity, the services could close or realign one facility or
another; the remaining sites could handle the workload, and would
meet the objective of eliminating capacity with either choice. 

In some cases, despite their different analytical approaches, both
the services' and cross-service groups' analyses supported closure or
realignment of the same activity.  However, in most cases, the
services' final recommendations were based on their own analyses, not
those of the cross-service groups.  Moreover, virtually all of the
services' recommendations resulted in moving workloads to like
facilities within the same service, as compared with the
cross-service groups' proposals, which generally involved moving some
workloads to other services' facilities.  In most cases in which the
services analyzed the ROI of the alternatives developed by the
cross-service groups, they did so with some variation of what the
groups' recommended.  Generally, the variation moved more work to
that service's own facilities than the alternatives presented by the
cross-service groups. 

As discussed below, the services' recommendations for closures and
realignments eliminate some of the excess capacity in the area
covered by the cross-service groups, but much of it will remain. 


--------------------
\1 Under Title 10, DOD activities are required to "maintain a
logistics capability .  .  .  to ensure a ready and controlled source
of technical competence and resources necessary to ensure effective
and timely response to a mobilization, national defense contingency
situations, and other emergency requirements." (10 U.S.C.  2464(a). 
The Secretary of Defense shall identify those logistical activities
that are necessary to maintain the logistics capability described in
paragraph (a).  (U.S.C.  2464 (a)(2). 


      DEPOT MAINTENANCE
-------------------------------------------------------- Chapter 3:2.1

The cross-service group for depot maintenance analyzed the capacity
of 24 facilities to maintain and repair 57 commodities, such as
aircraft engines and landing gear.  The group identified 40.1 million
direct labor hours of excess capacity.  It provided two sets of
alternatives to the services, each of which would close up to eight
depots.  The two sets of alternatives would have consolidated 12 or
13 workloads at single sites, and various other workloads at two or
more locations. 

Although some differences existed between which depots were included
in each set of alternatives, the capacities of the eight depots and
various workload transfers suggested for closure in the group's first
alternative amounted to 30.5 million direct labor hours.  The second
alternative would have eliminated between 34.5 million and 36.8
million direct labor hours.  In comparison, the services' BRAC 1995
recommendations for depot closures and realignments will reduce
excess capacity by about 20 million direct labor hours.  The services
recommended (1) realigning Letterkenny Army Depot, Pennsylvania; and
the Naval Undersea Warfare Center, Keyport, Washington; and (2)
closing Red River Army Depot, Texas; Long Beach Naval Shipyard,
California; and the Naval Surface Warfare Center, Louisville,
Kentucky.  These recommendations paralleled cross-service group
alternatives but were fewer in number.  The Air Force recommended
downsizing its five air logistics centers in lieu of closing San
Antonio and Sacramento Air Logistics Centers, as suggested by the
group.\2 The group also suggested closing the Naval Aviation Depot,
Jacksonville, Florida, and an additional shipyard--either Portsmouth,
New Hampshire, or Pearl Harbor, Hawaii.  The Navy did not concur with
these suggestions due to strategic and operational considerations. 

Even if the services' recommendations are accepted by the BRAC
Commission, the excess capacity remaining will be equivalent to about
four average-sized depots (5 million direct labor hours), on the
basis of the cross-service group's approach to calculating excess
capacity.  Much of this excess will be in Air Force and Navy aviation
repair capability. 

Had the services designated a joint depot or consolidated more
workloads through interservicing, one or more additional depots might
have been closed.  On May 4, 1994, the Deputy Secretary of Defense
directed the Secretaries of the Navy and the Air Force to consider
establishing a joint fixed-wing aviation depot.  However, the
cross-service group decided that a joint depot should be designated
from among those remaining after BRAC 1995 and did not suggest
establishing one in the alternatives it sent to the services. 


--------------------
\2 The Air Force reported that downsizing these depots will eliminate
9 million of the 20 million direct labor hours the cross-service
group estimated would be reduced by BRAC 1995.  As discussed in
chapter 4, we have concerns about the Air Force's plans for
downsizing these depots. 


      TEST AND EVALUATION AND
      LABORATORIES
-------------------------------------------------------- Chapter 3:2.2

The cross-service groups for test and evaluation and laboratories had
little impact on the services' recommendations.  The groups
identified large amounts of excess capacity, much of which will
remain after BRAC 1995.  DOD officials identified a number of
problems that constrained the groups' efforts.  These included the
following: 

  Test and evaluation and laboratory functions were split between the
     two cross-service groups, thereby creating artificial barriers
     around the functions and facilities that each could consider. 

  The groups chose analytical frameworks that broke work down into
     such small pieces that some of the sets of alternatives they
     suggested to the services proposed numerous transfers of small
     workloads from one facility to another.  The services did not
     find most of these options feasible or cost-effective. 

The cross-service group for test and evaluation analyzed the capacity
of 23 activities that supported test and evaluation of air vehicles,
electronic combat, and armaments/weapons and identified about 495,000
test hours of excess capacity.\3 However, the group did not set
capacity reduction goals. 

The group provided two sets of alternatives to the services.  The
first set of alternatives, developed by the group as a whole,
suggested numerous transfers of small workloads from one facility to
another.  The second set of alternatives, which was controversial,
proposed larger realignments of work and, in the view of the
chairpersons, had the greatest potential for reducing excess
capacity.  Among other things, these alternatives proposed
consolidating the air vehicle test and evaluation missions of the
Naval Air Warfare Center, Patuxent River, Maryland, primarily at
Edwards AFB, California, or vice versa, and consolidating the
electronic combat test and evaluation missions of Eglin AFB primarily
at the Naval Air Warfare Center, China Lake, California, or vice
versa.  The chairpersons said the services did not sufficiently
analyze this set of alternatives and that opportunities for
consolidations, cross-servicing, and infrastructure reductions were
being missed. 

While the Navy and the Air Force recommended some reductions and
consolidations of test and evaluation activities, each service's
recommendations were based on its own analysis.  The services'
analysis involved little transfer of workloads to other services'
facilities, and were largely unrelated to the work of the
cross-service group.  The Navy and the Air Force were unable to agree
on the assumptions to be used in COBRA scenarios.  The Army did not
recommend closing or realigning any test and evaluation facilities
proposed by the cross-service group.  Despite the lack of time at the
end of the process and the need to further refine their proposals for
major realignments, the chairpersons of the cross-service group said
they were reasonable and should be carefully analyzed by the
services. 

The cross-service group for laboratories analyzed the capacity and
functions of the 29 common support functions it identified as having
potential for consolidation, collocation, and cross-servicing.  The
group estimated that about 9,800 work years of excess capacity were
within these 29 common support functions.  On initial analysis, the
group found its approach yielded piecemeal results that usually
considered workload packages that fell below the BRAC threshold of
300 authorized civilians.  At this point, the group recognized that a
broader approach was needed to identify opportunities to eliminate
infrastructure through cross-servicing.  In late September 1994, the
group identified alternatives where it thought the services could
benefit from cross-servicing.  The chairperson directed the group to
focus data collection and analysis on the following alternatives: 

  Consolidate most command, control, communications, computers, and
     intelligence (C\4 I) acquisition and research and development
     (R&D) at Fort Monmouth, New Jersey. 

  Consolidate air launched weapons research, development, test and
     evaluation at Naval Air Warfare Center, China Lake. 

  Consolidate explosives at the Armament Research Development
     Engineering Center, Picatinny Arsenal, New Jersey, and the Naval
     Air Warfare Center, China Lake. 

  Consolidate propellants at the Naval Air Warfare Center, China
     Lake. 

The Navy eliminated a significant number of laboratory installations. 
In a more expansive recommendation, it moved its C\4 I activities to
San Diego rather than Fort Monmouth.  The Air Force elected to
realign these functions within its own infrastructure, with a
contingent moving to Fort Monmouth.  The Army proposed closing one
laboratory, realigning its functions internally, and chose not to
move its propellant work to China Lake.  Subsequently, the
cross-service group concluded that if the BRAC Commission accepted
the services' recommendations as submitted, about 4,300 work years of
excess capacity would still remain. 


--------------------
\3 This excess capacity existed at many installations in air
vehicles, electronic combat, and armament/weapons functions and in 18
test facility categories, including open air ranges, integration
laboratories, and measurement facilities. 


      MEDICAL TREATMENT FACILITIES
-------------------------------------------------------- Chapter 3:2.3

Of the 14 medical centers and 86 hospitals it analyzed,\4 the group
suggested closing 1 medical center and realigning 2 medical centers
and 13 hospitals.  The group did not set an overall capacity
reduction goal for BRAC 1995.  The services recommended closing one
medical center and two hospitals, and realigning two hospitals to
clinics.  The two closing hospitals are on bases that will be closed. 
At the time it made its suggestions, the cross-service group did not
know which bases the services would recommend for closure. 

For various operational reasons, the services said some of the
group's suggestions were not feasible.  The Air Force did not
calculate the ROI for the cross-service group's suggestions. 
However, both the Air Force and the Navy said they were downsizing
some facilities outside of the BRAC process.  Because in many cases a
small number of jobs are involved, a hospital can be reduced to a
clinic, and clinics can be eliminated outside of the BRAC process. 
Both services expressed concern that downsizing hospitals to clinics
as BRAC actions would limit future flexibility in that congressional
action would be required if plans needed to be revised. 

DOD's health care system's primary mission is to maintain the health
of 1.7 million active-duty service personnel and to be prepared to
deliver health care during times of war.  As we have reported, a
crucial task facing the Congress and DOD as they plan for the future
of the military health services system is to agree on the size and
structure of the medical force needed to meet wartime requirements.\5

A recent DOD study has challenged the Cold War assumption that all
medical personnel employed during peacetime are needed for wartime. 
Its conclusion that wartime medical requirements are much lower than
the medical system programmed for fiscal year 1999 raises the
question of whether U.S.  military medical forces should be reduced
to only those needed for wartime.  Thus, as we have reported, several
key variables that greatly affect the wartime demand for medical care
are still in debate.  And, while the cross-service group's analysis
and other studies indicate that some excess capacity in medical
facilities will remain after BRAC 1995, it is unclear that there is
consensus on wartime requirements and therefore on how much excess
capacity exists DOD-wide.  In addition, because DOD is still
obligated to meet the health care demands of nonactive-duty
beneficiaries,\6 downsizing decisions must also be made on the
cost-effectiveness of maintaining a military medical capacity larger
than that needed for wartime purposes. 


--------------------
\4 Medical centers provide patient care and have at least two
graduate medical education programs.  Hospitals provide inpatient and
outpatient care, and clinics provide only outpatient care. 

\5 See Wartime Medical Care:  Aligning Sound Requirements With New
Combat Care Approaches Is Key to Restructuring Force
(GAO/T/NSIAD-95-129, Mar.  30, 1995). 

\6 See Defense Health Care:  Issues and Challenges Confronting
Military Medicine (GAO/HEHS-95-104, Mar.  22, 1995). 


      UNDERGRADUATE PILOT TRAINING
-------------------------------------------------------- Chapter 3:2.4

The cross-service group measured capacity for undergraduate pilot
training for fixed-wing aircraft by number of airfield operations at
12 installations, and ramp space availability for rotary-wing
aircraft at 2 installations.  For fixed-wing aircraft, the group
identified excess capacity of 33 percent.  For rotary-wing aircraft,
the ramp space capacity was more than twice the amount needed.  The
group provided three sets of alternatives for the services to
consider.  The first, which aimed to reduce capacity and minimize the
movement of functions to new sites, proposed closing Naval Air
Station (NAS), Meridian, Mississippi; NAS, Whiting Field, Florida;
and Reese AFB, Texas.  Fixed-wing training was to be moved at the
services' discretion, while rotary-wing training was to move from
NAS, Whiting Field to Fort Rucker.  The second alternative assumed
redistribution of excess airfield operations capacity and added the
closure of Vance AFB, Oklahoma, to the first alternative.  The third
alternative added the closure of NAS, Corpus Christi, to alternative
two and transferred its outlying field and air-space capacity to NAS
Kingsville. 

The Air Force recommended closing Reese AFB, and the Navy recommended
closing Meridian and realigning Corpus Christi from a naval air
station to a naval air facility (NAF).  The group estimated that the
Air Force and Navy recommendations would reduce excess capacity for
fixed-wing pilot training to about 8 percent.  Capacity for
rotary-wing training would remain at more than twice the ramp space
needed. 

The Air Force disagreed with the cross-service group's second and
third alternatives, which included closing Vance AFB.  It viewed
these alternatives as unacceptable because they both exceeded 100
percent of capacity when planned capacity requirements were
considered.  The Air Force concluded that for the foreseeable future,
it was necessary to account for the uncertainty of such factors as
the turmoil of multiple base closings and the fielding of new
aircraft, including the Air Force's T-1, the Navy's T-45, and both
services' joint pilot training system. 

The Navy rejected the group's proposal to move its helicopter
training from Whiting to Fort Rucker because its cost analysis
indicated high closure costs with a 15-year ROI.  The proposal, as
interpreted by the Navy, would simply have collocated the Army and
Navy helicopter training at Fort Rucker, not consolidated the
training--a concept the Navy continues to oppose. 

The Navy retained Corpus Christi as a NAF in order to provide
additional airfield capacity.  This additional capacity will enable
the Navy to locate all of its strike training at NAS Kingsville,
Texas; to accept mine warfare helicopter assets in support of the
Mine Warfare Center of Excellence at Naval Station, Ingleside,
California; and to move additional aviation assets to the NAF as
operational considerations dictate.  Because the cross-service group
made no recommendations that affected the Army, no Army analysis was
required. 

A key policy decision for undergraduate pilot training consolidations
and potential base closings was the Secretary of Defense's April 15,
1993, directive to the services to consolidate initial training on
fixed-wing aircraft and to transition to a common primary training
aircraft.  The Secretary also directed the Army and the Navy to study
alternatives for consolidating Army, Navy, and Marine Corps initial
training on helicopters at Fort Rucker and to develop detailed
proposals for implementation within 90 days. 

The Navy and the Air Force agreed to a joint primary aircraft
training system for fixed-wing aircraft and began planning for the
joint training aircraft acquisition, syllabus development, and common
training philosophies.  The cross-service group's proposals and the
services' recommendations factored in the requirements for the new
joint training system.  However, the Navy has not agreed to
consolidate helicopter training at Fort Rucker because it considers
its training requirements unique.  A firm decision to consolidate
helicopter training would be needed to facilitate further reductions
in the infrastructure for undergraduate pilot training. 


   CONCLUSIONS AND RECOMMENDATIONS
---------------------------------------------------------- Chapter 3:3

Some reductions in excess capacity were achieved within each service
in support areas.  However, OSD's efforts to encourage the services
to share assets, consolidate workloads, and reduce capacity in five
functional areas met with limited success because of reliance on
service decision-making and consensus; insufficient time; and, in
some cases, a narrow analytical approach.  More time for interactions
between the services and with OSD, and stronger DOD leadership will
be required to ensure progress in the future. 

Because the services did not completely analyze the set of
alternatives developed by the chairpersons of the cross-service group
for test and evaluation, the BRAC Commission may wish to have the
services complete detailed analyses, including cost analyses, for its
consideration. 

If there is another BRAC round, we recommend that the Secretary of
Defense

  begin the cross-service process 1 year before the services' BRAC
     process, and for each common support function studied,
     incorporate specific capacity reduction goals in OSD's initial
     BRAC guidance and

  prior to the BRAC round, identify and make the policy decisions
     necessary in each area to merge service functions that would
     result in further reductions in infrastructure. 


THE AIR FORCE'S PROCESS MADE IT
DIFFICULT TO EASILY TRACK
RESULTING RECOMMENDATIONS
============================================================ Chapter 4

The Air Force recommended closures, disestablishments,\1 and
realignments of 23 installations, including 7 air reserve bases.  It
also proposed reconsideration of seven prior BRAC decisions.  The Air
Force considered the alternatives suggested by the cross-service
groups and incorporated five of them in its recommendations. 

While some improvements in the process were made, certain aspects of
the Air Force's evaluation process remained largely subjective. 
Initial analytical phases of the Air Force's process were influenced
by preliminary estimates of base closure costs.  In some instances,
these closure costs appeared to materially affect how the bases were
valued and thus what bases were first considered for closure and
realignment.  Restricted access to the Air Force's process as it was
unfolding, the subjective nature of the decision process, and limited
documentation in some areas affected our ability to fully assess the
analyses behind some decisions, particularly those decisions
excluding bases from closure or realignment.  These and other factors
caused us to question a number of the Air Force's recommendations. 

Air Force excess capacity analyses suggested the potential for a
greater number of closures and realignments than was recommended. 
The Air Force did not propose closure of any active-duty operational
aircraft bases, although its capacity analyses showed a potential to
close eight.  Factors limiting Air Force closures and realignments
included operational, environmental, and closure cost considerations. 


--------------------
\1 According to OSD's BRAC definitions, bases are closed and
activities are disestablished. 


   ALTHOUGH SOME IMPROVEMENT HAS
   BEEN MADE, CONCERNS ABOUT THE
   PROCESS REMAIN
---------------------------------------------------------- Chapter 4:1

As in previous BRAC rounds, the Secretary of the Air Force
established a group of senior Air Force military and civilian
personnel--the Base Closure Executive Group--to administer BRAC 1995. 
The Executive Group was assisted by the Air Staff Base Closure
Working Group.  Minutes of the Executive Group's meetings indicated
extensive interaction with, and direction from, the Secretary, for
example, in setting capacity reduction goals or in selecting bases to
evaluate for closure.  However, when the Secretary met with members
of the Executive Group and others to discuss specific closure
options, the meetings were not considered official Executive Group
meetings, and details of these meetings were not documented. 

An important part of the Air Force process was evaluating its bases
against DOD's selection criteria.  The Air Force weighed all eight
criteria simultaneously, emphasizing the first five criteria, to
place its bases in three tiers, suggesting high (tier 1) to low (tier
3) value for retention purposes.\2

In prior BRAC rounds, the Air Force used a subjective color-coded
scale to assign a value to individual criteria and their subelements
and used subjective judgments to tier its bases.\3 The lowest-tiered
bases provided the starting point for considering bases for possible
closure and realignment.  We reported in 1993 that the Air Force's
rating and tiering approach, including limited documentation, made it
difficult to track and verify the decision-making process.\4 The Air
Force did improve its rating process for BRAC 1995 by establishing a
numerical approach to determine the scores for five of DOD's eight
selection criteria that had not been quantified in BRAC 1993 (the
first three and last two).  However, these values were ultimately
translated once again to color codes.  The color codes were still
used to represent individual subelement scores and to aggregate the
subsequent scores for each of the five criteria.  Cost to close, ROI,
and economic impact information, the three remaining selection
criteria, were given numerical values. 

A cumulative rating, either color-coded or numerical, was not
calculated for each base, unlike the other DOD components.  Instead,
the Executive Group's members subjectively weighed the five criteria
rated by color codes and the three criteria with numerical values,
with emphasis on the military value and cost criteria, and voted by
secret ballot on a base's score.  A 3-point scale was used, with a
base's score ranging from high to low.  With 13 members voting, an
individual base could receive a maximum score of 39 points.  Natural
break points were used to place bases in one of the three tiers. 
Bases placed in the lowest, or third, tier provided the starting
point for considering bases for potential closure or realignment. 

Prior to voting, a co-chairman of the Executive Group summarized for
the members which of the eight selection criteria were most
important.  For the Air Force's small aircraft and large aircraft
subcategories, depots, and product centers and laboratories, the
co-chairman emphasized giving the greatest weight to the first
criterion dealing with mission requirements and then to the fourth
and fifth criteria dealing with cost and savings estimates associated
with closing the bases.  The minutes do not provide information about
how the members actually weighed the eight criteria when voting. 


--------------------
\2 The Air Force, unlike the other services, did not establish a
distinct military value for its bases. 

\3 A "green" rating meant that for a particular attribute, a base was
desirable for retention; "red" meant less desirable; and a "yellow"
rating fell between the two.  Each color could also have a plus or
minus designation.  In prior rounds, after scoring the bases or
individual subelements, the Air Force gave each base an overall color
rating for six of the eight DOD selection criteria. 

\4 Military Bases:  Analysis of DOD's Recommendations and Selection
Process for Closures and Realignments (GAO/NSIAD-93-173, Apr.  15,
1993). 


      CONCERNS ABOUT ASPECTS OF
      THE AIR FORCE'S PROCESS
-------------------------------------------------------- Chapter 4:1.1

As in past rounds, the process was not sufficiently documented to
substantiate the extent of deliberations and analyses leading to
decisions to close or realign individual bases.  This was especially
problematic for bases where deliberations occurred and decisions were
made that bases could not be closed or realigned.  In these cases, we
relied on oral discussions to gain insight into the rationale behind
some decisions.  Although Air Force Audit Agency (AFAA) personnel
were permitted access to portions of the Air Force's process from the
beginning, they too were not given access to all the documentation
for the final recommendations until they were made public. 
Therefore, they are still working to complete their final reviews.\5

Second, closure costs played a major role in the Air Force's
decision-making from the beginning of its process.  Unlike previous
BRAC rounds, the 1995 BRAC process appeared more influenced by
options that would have smaller closure costs and quicker savings. 
The closure costs used in the tiering process were preliminary, based
on the premise that installations would be closed and, with few
exceptions, all personnel, equipment, and functions would move to
other locations.  However, in a number of instances, we found these
initial estimates were significantly higher than might be the case
later, when more definitive assessments were made. 

The preliminary cost estimate could vary significantly from actual
costs for full or partial closures or realignments.  We are concerned
that this approach could have affected the extent to which bases with
high closing costs or long payback periods were seriously examined
for closure or realignment.  However, the nature of the Air Force
process and its associated documentation did not provide the basis to
conclusively determine whether this was the case. 

In one instance, our analysis showed that Rome Laboratory, New York,
was placed in the top tier rather than a lower tier, where it more
likely would have been placed had closure costs not been emphasized. 
An Air Force Working Group official stated that the high preliminary
closure cost ($134 million) and long payback period (over 100 years)
were reasons for this placement.  Later in the process, the Air Force
took a closer look at Rome Laboratory based on a cross-service group
suggestion to close the laboratory.  The Air Force found that the
costs were much lower ($52 million) and the payback period was much
shorter (4 years) after calculating more precise closing cost data
for this specific recommendation.  Without the cross-service group
suggestion, the Air Force might not have seriously considered this
recommendation and might have missed an opportunity to reduce this
excess capacity and produce savings. 

In another instance, we found that a second-tier base (Offutt AFB,
Nebraska) had lower color-coded scores in the first three criteria
than a third-tier base (Ellsworth AFB, South Dakota).  While not
precisely stated in the Air Force documentation, the tiering decision
may have resulted from significant differences in closure costs. 
Ellsworth's closure costs were estimated to be $41 million, while
Offutt's were projected to be $515 million.  However, Air Force
documentation does not provide the rationale for the base's relative
standing.  In this case, the relative standing apparently would not
have affected any decisions, since no bases were selected for closure
in this basing category. 


--------------------
\5 AFAA oversaw and reviewed each phase of the process.  It (1)
reviewed and reported on the Air Force's internal control program,
(2) reviewed the data collection process through statistical sampling
of the color-coded criteria, (3) reviewed cross-service data
collection, and (4) performed a limited review of the economic and
cost data.  During its reviews, AFAA provided at least 17 interim
memorandums to the Air Force to disclose discrepancies to ensure
timely corrective action.  At the time of our report, it was
completing its reviews and reports for each segment.  AFAA estimates
the reports will be completed between late April and June 1995. 


   IDENTIFYING CLOSURE AND
   REALIGNMENT CANDIDATES
---------------------------------------------------------- Chapter 4:2

To begin the process for selecting bases for closure, the Air Force
identified all bases (active and reserve components) in the United
States that had at least 300 authorized civilian positions.  The Air
Force identified 99 bases (72 active and 27 reserve) that for the
most part met this criterion and grouped them into 7 categories, with
a total of 13 subcategories.\6 The Air Force also looked at Air
National Guard and Air Force Reserve bases that did not meet the base
closure threshold of 300 civilian positions. 

The Executive Group sent a detailed data call to the 99 bases to
gather information for a comparative analysis.  It also developed
preliminary closure cost estimates for each base using the COBRA
model. 

The Secretary of the Air Force excluded 15 installations from the
analysis process because they were either essential to the Air
Force's mission or located in geographical areas that were
strategically important.  For example, McChord AFB, Washington, was
excluded because it is the primary deployment base for the Army's I
Corps and supports the rapid deployment of Army troops to the Pacific
theater.  Based on the Executive Group's analysis, the Secretary
eliminated two categories and one subcategory that encompass nine
additional bases because in its judgment, no significant excess
capacity existed.  We found no reason to question the basis for these
decisions. 


--------------------
\6 Three bases--Onizuka in California, Vance in Oklahoma, and Arnold
in Tennessee--had less than the 300 authorized civilian positions but
were included because of their missions. 


      CAPACITY ANALYSIS
-------------------------------------------------------- Chapter 4:2.1

To identify excess capacity, the Executive Group compared each of the
99 bases' projected force structure requirement with its total
capacity and future mission requirements.  For example, for bases
with an aircraft mission, the Executive Group compared the maximum
number of mission aircraft that could be parked at the base with the
base's projected requirement.  Table 4.1 displays the Air Force's
categories and subcategories along with the number of bases initially
considered; the number of bases excluded due to mission essentiality
or insufficient capacity; and the number of bases that were selected
as candidates for further study, that is, evaluated against DOD's
eight selection criteria. 



                                    Table 4.1
                     
                         Air Force Basing Categories and
                                  Subcategories


                               Total      Mission/     No excess  Bases left for
Category/subcategory           bases     geography      capacity  detailed study
--------------------------  --------  ------------  ------------  --------------
Operations
 Missiles                          4             1             0               3
 Large aircraft                 19\a             4             0              15
 Small aircraft                   15             4             0              11
Undergraduate flying               5             0             0               5
 training
Industrial/technical
 support                           5             0             0               5
 Depots                            6             0             0               6
 Product centers and labs          3             2             0               1
 Test and evaluation
Education and training
 Technical training                4             0             4               0
 Education                         2             2             0               0
Space
 Space support\b                   3             2             1               0
 Satellite control                 2             0             0               2
Other/administrative               4             0             4               0
Air Reserve component\c
 Air National Guard              13\             0             0              13
 Air Force Reserve                14             0             0              14
================================================================================
Total                             99            15             9              75
--------------------------------------------------------------------------------
\a Three additional large aircraft bases were considered in the
missile bases subcategory. 

\b The entire space support subcategory was eliminated because the
Air Force found no excess capacity.  Two of its bases, Patrick AFB,
FL, and Vandenburg AFB, CA, were eliminated because of mission
considerations. 

\c Air reserve component bases were generally not compared against
each other.  Instead, they were reviewed separately for potential
cost-effective relocations to other bases. 

As a result of the capacity analysis, the Executive Group, in
consultation with the Secretary, identified the maximum targeted
number of base closures that could be achieved within each
subcategory.  Table 4.2 shows, by subcategory, the number of bases
studied and the number of bases that the Air Force considered excess
to requirements.  This excess became the Air Force's base reduction
goal. 



                          Table 4.2
           
            Air Force Bases Studied and Considered
                            Excess

                                                   Reduction
                                   Number of            goal
Category/subcategory           bases studied  (excess bases)
----------------------------  --------------  --------------
Operations
 Missiles                                  3               1
 Large aircraft                           15               4
 Small aircraft                           11               3
Undergraduate flying                       5               1
 training
Industrial/technical
 support                                   5               2
 Depots                                    6               3
 Product centers and                       1               0
 laboratories
 Test and evaluation
Education and training
 Technical training                        0               0
 Education                                 0               0
Space
 Space support                             0               0
 Satellite control                         2               1
Other/administrative                       0               0
Air Reserve component
 Air National Guard                       13               3
 Air Force Reserve                        14               5
============================================================
Total                                     75              23
------------------------------------------------------------
The Executive Group indicated that it was unlikely the Air Force
could achieve reduction goals due to its constrained ability to
provide parking space and facilities for aircraft.  That information
would be developed during later analyses when actual realignments of
force structure were considered. 

After considering the preliminary closing costs, capacity analyses,
operational factors such as the type of aircraft supported and the
impact on air quality standards, and air encroachment potential at
receiving bases,\7 the Secretary of the Air Force directed the
Executive Group to assess how the missions of third-tier bases might
be allocated to other bases.  An analysis of third-tier bases was
completed, and if none were considered candidates for closure or
realignment, the Secretary then directed that bases in the other
tiers also be considered.  During these analyses, more detailed COBRA
estimates were developed for various scenarios. 


--------------------
\7 Environmental impact is the eighth DOD selection criterion. 
However, because of its perceived importance, the Air Force also
considered air quality within criteria two, which concerns the
availability and condition of land, facilities, and associated air
space.  An Air Force Working Group official told us that beside being
a factor in deciding whether to keep open or close a base, it was
also a factor in excluding bases.  For example, Beale and McGuire
were eliminated from consideration as receivers of other bases'
missions, because adding a new type or additional aircraft could
increase the air pollution (measured in tons) beyond the allowed
limits. 


   SOME AIR FORCE BRAC 1995
   RECOMMENDATIONS RAISE QUESTIONS
---------------------------------------------------------- Chapter 4:3

The Air Force recommendations addressed the targeted active component
excess capacity primarily through realignments and the targeted
reserve component excess capacity through closures.  The Air Force
recommended 23 closures, realignments, and disestablishments, and 7
changes to prior BRAC decisions.  Three of the closures and the two
disestablishments affect active duty facilities; no operational
aircraft bases are recommended for closure.  Table 4.3 shows the
bases the Secretary of the Air Force recommended for
closure/disestablishment and realignment by category/subcategory. 



                                    Table 4.3
                     
                        Air Force BRAC Recommendations By
                                     Category

                                Number  Closure or
Category                   recommended  disestablishment          Realignment
------------------------  ------------  ------------------------  --------------
Large aircraft/missile               2  0                         Grand Forks
                                                                  AFB
                                                                  Malmstrom AFB

Small aircraft                       0  0                         0

Satellite control                    1  0                         Onizuka AFB

Depots                               5  0                         Hill AFB
                                                                  Kelly AFB
                                                                  McClellan AFB
                                                                  Robbins AFB
                                                                  Tinker AFB

Product centers and                  3  Brooks AFB                Kirtland AFB
laboratories                            Rome Laboratory

Test and evaluation                 4\  AFEWES                    Eglin AFB
                                        REDCAP                    Hill AFB

Undergraduate flying                 1  Reese AFB                 0
training

Air Force Reserve                    2  Bergstrom ARB             0
                                        Greater Pittsburgh
                                        IAP ARB

Air National Guard                  5\  Moffett Federal Airfield  0
                                        AGS
                                        Ontario IAP AGS
                                        Roslyn AGS
                                        Springfield-Beckley
                                        Municipal Airport AGS
                                        North Highlands AGS

================================================================================
Total                               23  12                        11
--------------------------------------------------------------------------------
While we have some concerns about the Air Force's process, we found
no information that would lead us to question 15 of the 23 decisions. 
Seven of the 15 decisions involved cost-effective closures of air
reserve component bases, which will reduce excess capacity.  Our
review of the other eight showed that the decisions were based on
bases and activities having relatively lower scores from the eight
selection criteria, excess capacity, and low projected workloads. 
However, we do have unresolved questions about the basis for the
remaining eight recommendations. 


      REESE AFB CLOSURE
-------------------------------------------------------- Chapter 4:3.1

The Air Force recommended closing Reese AFB, Texas, because it rated
last relative to the other four bases in the undergraduate flying
training category when measured against the eight DOD selection
criteria.  However, community concerns arose over the issues of
potential errors in the Air Force's scoring of selection criterion 1
(mission requirements) and its reliance on data gathered under the
cross-service group process to make this assessment. 

The Air Force's initial review of the community concerns indicated
that while there were data errors, they did not significantly alter
the relative scoring of the bases for criterion 1 and would not have
changed the recommendation.  The Air Force was finalizing its
response to these issues when we completed our fieldwork. 
Accordingly, we did not have time to fully assess the situation. 


      GRAND FORKS AFB REALIGNMENT
-------------------------------------------------------- Chapter 4:3.2

The Joint Chiefs of Staff review of this recommendation found that
the realignment of Grand Forks AFB, North Dakota, was problematic
because of questions about its potential impact on future
antiballistic missile (ABM) system deployment rights under terms of
the ABM treaty.  Thus, the Air Force's BRAC recommendation was
adjusted to specify that the missile unit at Grand Forks AFB would
inactivate unless, prior to December 1996, the Secretary of Defense
determined that the need to retain ballistic missile defense options
would preclude this action.  The Secretary of the Air Force
recommended that if such a determination was made, that the Minot AFB
missile group be deactivated.  After receiving the Secretary of
Defense's recommendations, the BRAC Commission, on March 7, 1995,
added Minot AFB to the realignment list to reflect its potential for
realignment. 


      KIRTLAND AFB REALIGNMENT
-------------------------------------------------------- Chapter 4:3.3

According to the Air Force, Kirtland AFB, New Mexico, was recommended
for realignment because it rated low relative to the other five bases
in the product center and laboratory subcategory, considering all
eight selection criteria.  Our analysis of the eight criteria does
not support the Air Force's reasoning.  In addition, other issues
need to be addressed:  (1) certain costs to operate existing
facilities may be transferred to DOE; (2) the realignment of Kirtland
AFB will not reduce excess capacity in the product center and
laboratory subcategory, since the Phillips Laboratory at Kirtland
will not close or move; and (3) the Air Force may not have considered
other issues regarding those facilities that are scheduled to remain
at Kirtland. 

Our analysis shows that Kirtland's first military value criterion was
among the highest of the six bases rated in the subcategory.  From
our analysis of the remaining seven criteria, it appears that closure
cost considerations (criterion 4 and 5 in the Air Force process,
involving NPV and ROI years) made Kirtland an attractive realignment
candidate. 

Kirtland's realignment would reduce the Air Force's operational
overhead, including support previously provided to DOE and its Sandia
National Laboratory located on Kirtland.  However, the Air Force's
savings could mean an increase in operational support costs borne by
DOE.  Thus, while DOD might reap some savings, the government would
see much less savings.  We did not have time to fully assess the
magnitude and validity of costs that would be shifted to DOE;
however, DOE estimates they would exceed $30 million per year in
addition to one-time costs of over $60 million. 

In previous BRAC rounds, we expressed concern that some DOD BRAC
decisions excluded costs that may be incurred by other federal
agencies as a result of its actions, and we recommended that DOD at
least disclose such costs.  DOD did not concur with our
recommendation and in this BRAC round did not identify those costs. 

The Air Force will reduce overall infrastructure but not laboratory
capacity with this recommendation.  The Air Force's Phillips
Laboratory at Kirtland will remain in place.  Finally, there are
questions about whether the Air Force gave adequate consideration to
security and operational issues regarding weapons storage facilities
at Kirtland.  To all appearances, the Air Force did not thoroughly
consider all the factors associated with leaving this activity at
Kirtland. 


      FIVE DEPOT REALIGNMENTS
-------------------------------------------------------- Chapter 4:3.4

Citing the high costs of closure, the Air Force recommended that none
of its five maintenance depots be closed, but instead that each be
realigned.  The Air Force based the realignments, which included the
consolidation of 14 commodity groups, on studies that were incomplete
and ongoing outside the BRAC process.  Thus, we question the validity
of the Air Force's resulting depot realignment recommendations. 

The studies--considered to be a regular depot workload planning
evaluation and conducted independent of the BRAC process--were
initiated by the Air Force Materiel Command (AFMC) in July 1994.  The
purpose of the studies was to evaluate the feasibility of realigning
24 commodity/process workloads.  The depot maintenance workloads for
almost all weapon systems and some functional processes are currently
consolidated at specific air logistics centers.  For example, depot
maintenance for the F-16 aircraft and for landing gear for all Air
Force aircraft is consolidated at the Ogden Center, Hill AFB, Utah. 
The Command expected that further realignments, if approved, would
occur along with other realignments as a result of the BRAC review. 
However, Command officials said that even though the studies were
incomplete, they were asked to provide their data for use in
formulating the Air Force's BRAC depot consolidation recommendation. 

The workload consolidation studies are expected to be completed and
reviewed by the Command and the air logistics centers by mid-April
1995.  Command officials stated that once the review process is
complete, they can present a coordinated position on recommended
commodity or workload consolidations.  Given that data from their
incomplete studies were used to help make BRAC recommendations, these
officials believe that they should have the opportunity to suggest
revisions to them. 

The findings and recommendations of the current versions of the
Command's studies do not fully support the realignments and
consolidations recommended in DOD's February 1995 BRAC report.  For
example, the Command's study team report recommends no consolidation
of the plating function.\8 However, for the BRAC recommendation, the
Air Force recommended this function be eliminated at one of the five
depots and at the same time designated the depot as a consolidation
center for hydraulics--a function dependent on plating capability. 
The March 10, 1995, AFMC commodity study on plating recommended no
plating consolidation, noting that other consolidation study teams
assumed that plating is available at each depot.  Likewise, the March
1, 1995, consolidation study for the instrument and display workload
recommended consolidating this workload at two sites versus the three
sites called for in the BRAC report.  Also, the report on advanced
composites, plastics, and metal bonding recommended workload
consolidation at two sites instead of the one site recommended in the
BRAC report. 

In addition to inconsistencies between the preliminary Command
studies and the BRAC recommendations, we noted that the studies did
not cover two areas critical to making a meaningful assessment of the
cost-effectiveness of proposed consolidations.  Command officials
affirmed that the workload consolidation reports do not address (1)
the potential impact of workload consolidation on the rates charged
by the air logistics centers for their services and (2) the extent to
which residual workload capability would have to be retained at each
depot subject to workload transfers to other depots.  However, the
officials said that the Command is studying both of these issues and
plans to report on them as part of the workload consolidation study. 
These data appear to be essential for making a meaningful assessment
of the cost-effectiveness of the proposed consolidations. 

We also noted that workload shifts resulting from realignments
proposed by the Air Force would move workload to depots that appear
to be downsizing apart from BRAC.  For example, one depot, Sacramento
Air Logistics Center, California, is losing almost all its unique
airframe workload as a result of force structure downsizing.  As
workload declines and commensurate personnel positions are reduced,
it would become less costly in the future to close this facility. 
However, if the Air Force continues to spread workload among all five
depots, it will continue to be costly to close any of these
activities in the future. 


--------------------
\8 Plating is a metal finishing process that restores dimensions and
improves properties, such as corrosion resistance, hardness, and
surface smoothness to a part so that it can perform its designed
functions. 


      CHANGES TO 1991 AND 1993
      BASE CLOSURE COMMISSION
      RECOMMENDATIONS
-------------------------------------------------------- Chapter 4:3.5

The Air Force recommended seven changes to recommendations for the
closure and realignment of five bases in 1991 and 1993.  These
changes were made because of either force structure changes or Air
Force evaluations that redirected missions and functions.  The Air
Force believes they will result in about $20.6 million recurring
annual savings.  Table 4.4 shows the recommended changes to 1991 and
1993 BRAC Commission recommendations. 



                                    Table 4.4
                     
                        Recommended Changes to Prior BRAC
                                    Decisions

Base              Recommended change              Justification
----------------  ------------------------------  ------------------------------
Griffiss AFB      Inactivate the 485th            Renovation of originally
                  Engineering Installation Group  planned receiver site too
                  (EIG) and transfer its          costly.
                  functions elsewhere.

Griffiss AFB      Close the airfield at Griffiss  Operation of airfield at
                  AFB and use the Fort Drum       Griffiss AFB far exceeds
                  airfield for mobility,          earlier estimated costs.
                  contingency, and training
                  support to the 10th Infantry
                  (Light) Division.

Homestead AFB     Relocate 301st Rescue Squadron  The relocation will enable the
                  (AFRES) to Patrick AFB, FL,     301st to provide primary
                  instead of reconstructing its   support to space shuttle
                  facilities at Homestead AFB.    missions more efficiently and
                                                  cost-effectively with less
                                                  disruption to the unit and
                                                  mission.

Homestead AFB     Relocate 726th Air Control      Original receiving base, Shaw
                  Squadron to Mountain Home AFB,  AFB, SC, does not have
                  ID.                             adequate radar coverage of
                                                  training airspace.

Lowry AFB         Inactivate Det. 1, Space        Consolidate software support
                  Systems Support Group; some     at Peterson AFB with resulting
                  personnel and equipment will    elimination of personnel
                  relocate to Peterson AFB, CO.   positions and cost savings.

MacDill AFB       Retain MacDill airfield as      Deputy Secretary of Defense
                  part of MacDill AFB.            and Chairman of the JCS have
                                                  validated airfield
                                                  requirements of the two
                                                  unified commands at MacDill
                                                  AFB.

Williams AFB      Retain Armstrong Laboratory     Facilities at Orlando, FL, are
                  Aircrew Training Research       not available at the estimated
                  Facility at its present         cost and Navy actions in 1993
                  location as a stand-alone       BRAC reduced pilot resources
                  activity.                       necessary for the facility's
                                                  work.
--------------------------------------------------------------------------------

   IMPACT OF CROSS-SERVICE GROUP
   ALTERNATIVES ON AIR FORCE
   DECISIONS
---------------------------------------------------------- Chapter 4:4

As part of its process, the Air Force assessed alternatives offered
by the five functional cross-service groups.  The Air Force collected
data on behalf of and under the direction of the joint cross-service
groups.  From the responses to the data calls, the cross-service
groups conducted functional analyses of the bases within each
subcategory for criterion 1 and developed ratings for them.  The Air
Force then developed a criterion 1 grade for each base from this
data.  The final Air Force recommendations incorporated five of the
cross-service groups' alternatives.  The Air Force considered and
analyzed the following cross-service alternatives: 

  Test and Evaluation.  The Air Force incorporated two of the five
     alternatives related to test and evaluation facilities in its
     recommendations--the disestablishment of the Air Force
     Electronic Warfare Evaluation Simulator (AFEWES) Activity at
     Fort Worth, Texas, and the Real-Time Digitally Controlled
     Analyzer Processor (REDCAP) Activity at Buffalo, New York.  The
     two activities were not part of the Air Force process because
     they did not meet DOD's threshold of 300 authorized civilian
     positions.  The Air Force rejected the other three alternatives,
     which included moving Air Force functions to other services,
     because it did not consider the moves cost-effective or
     operationally beneficial. 

  Product Centers and Laboratories.  The Air Force incorporated parts
     of 2 of 11 recommended alternatives related to laboratories--the
     closure of Rome Laboratory and relocation of its functions to
     Hanscom AFB, Massachusetts, and Ft.  Monmouth, New Jersey.  It
     rejected the rest, citing cost and operational considerations. 

  Undergraduate Pilot Training.  The Air Force incorporated one of
     three alternatives related to undergraduate pilot training--the
     closure of Reese AFB, Texas.  This alternative supported the Air
     Force's own analysis.  The other two alternatives were to close
     a second Air Force pilot training base.  The Air Force concluded
     that too much capacity would be reduced if two pilot training
     bases were closed. 

  Medical Treatment Facilities.  The Air Force rejected all eight
     alternatives for medical treatment facilities.  The Air Force
     said that four of the alternatives would affect readiness or
     have service-specific mission implications.  The other
     alternatives were rejected because the Air Force either thought
     they required a more extensive evaluation of availability of
     other resources or wanted to keep open options to size the
     medical asset to fit future requirements. 

  Maintenance Depots.  The Air Force considered the two proposed
     alternatives to close two maintenance depots because they
     supported its own analysis, which placed both bases in the
     bottom tier.  The two depots--Kelly AFB, Texas, and McClellan
     AFB, California--became the initial focus for possible closure,
     and, until early February 1995, the Air Force was analyzing this
     option.  However, the Air Force concluded that one-time costs to
     close one or both depots would be significant ($653 million for
     Kelly and $514 million for McClellan and over $1 billion for
     both).  According to a Working Group official, recommending
     closure of one or both depots would have precluded recommending
     other actions.  This official also said that, although not a
     factor in the Air Force's analysis, the Air Staff knew that
     considerable additional costs would be incurred for
     environmental cleanup if any depots were closed.  On February 3,
     1995, the Secretary directed the Executive Group to concentrate
     on other alternatives, such as consolidations and downsizing. 
     This new direction led to a recommendation to consolidate 14
     commodity groups, realign workloads within the 5 depots, and
     downsize personnel. 


   COST WAS AN IMPORTANT FACTOR IN
   AIR FORCE DECISIONS
---------------------------------------------------------- Chapter 4:5

As indicated earlier, closure costs were an important factor in the
Air Force's decision-making process.  The closure and realignment of
AFBs selected for the most part had relatively small implementation
costs and provided immediate or near-term savings.  According to a
Working Group official, the planning target to spend on implementing
all recommendations was $1 billion.  Table 4.5 summarizes costs and
savings data for the bases recommended for closure and realignment. 



                                    Table 4.5
                     
                      Estimated Costs and Savings Resulting
                          From Air Force Recommendations

                      (Fiscal year 1996 dollars in millions)

                                               Recurring
                        One-time  6-year net      annual       ROI\d     20-year
Installation             costs\a   savings\b   savings\c       years       NPV\e
--------------------  ----------  ----------  ----------  ----------  ----------
Grand Forks AFB            $11.9      $111.8       $35.2   Immediate      $447.0
Malmstrom AFB               17.4         5.2         5.1           4        54.3
Onizuka AFB                124.2     (125.7)        30.3           8       181.6
Five Air Logistics         183.0       138.6        89.0           2       991.2
 Centers
Brooks AFB                 185.5     (138.7)        27.4           7       142.1
Kirtland AFB               277.5     (158.8)        62.0           3       464.5
Rome Laboratory             52.8      (15.1)        11.5           4        98.4
AFEWES                       5.8       (2.6)         0.8           7         5.8
Eglin AFB                    2.2         6.3         2.6           1        31.4
REDCAP                       1.7         1.9         0.9           1        11.0
Utah Test and                3.2        62.4        12.4   Immediate       179.9
 Training Range,
 Hill AFB
Reese AFB                   37.3        51.9        21.5           2       256.8
Bergstrom ARB               13.3        93.4        20.9   Immediate       291.4
Greater Pittsburgh          22.3        36.3        13.1           2       161.1
 ARS
Moffett Federal             15.2         4.4         4.8           4        50.1
 Airfield AGS
North Highlands AGS          1.3       (0.5)         0.2           8         1.5
Ontario IAP AGS              0.8       (0.3)         0.1           8         0.9
Roslyn AGS                   2.4         0.7         0.7           4         7.6
Springfield-Beckley         23.4       (5.6)         4.2           6        35.1
 Municipal Air Port
 AGS
485th Engineering            0.5        26.8         2.9   Immediate        53.6
 Installation Group,
 Griffiss AFB
Airfield Support for        51.3      (12.9)        12.7           5       110.8
 Army, Griffiss AFB
301st Air Rescue             4.6         1.5         1.5           4        15.4
 Squadron, Homestead
 AFB
726th Air Control            7.4         2.3         0.2   Immediate         4.6
 Squadron, Homestead
 AFB
Det.1, Space Support         1.7        10.9         3.0           1        39.0
 Group, Lowry AFB
Williams AFB                 0.0        18.4         0.3   Immediate        21.0
================================================================================
Total                   $1,046.7      $112.6      $363.3                $3,656.1
--------------------------------------------------------------------------------
Note:  Totals may not compare to those in DOD's report due to
rounding. 

\a This represents unique one-time costs to implement the
recommendation. 

\b This represents net savings within the 6-year implementation
period. 

\c Projected recurring annual savings after the 6-year period. 

\d Return on investment (ROI) years means the number of years after
completion of the implementing action until savings begin to exceed
the costs associated with the implementing action.  "Immediate" means
upon completion of the implementing action. 

\e Net present value (NPV) is net savings after closure costs,
measured over 20 years and discounted at the rate of 2.75 percent. 

AFAA did a limited review of COBRA cost and savings data associated
with its service's recommendations.  AFAA audited a sample of the
higher cost elements calculated by COBRA for the Air Force's
preliminary and more detailed closing cost analyses and determined
that data entered into the COBRA model could be traced to an
appropriate source.  They did not verify that all inputs to COBRA
were certified.  Since the public announcement of the BRAC
recommendations, the Air Force has sent teams of personnel, including
AFAA representatives, to affected bases to develop more comprehensive
data regarding expected costs and savings. 


   COST AND OPERATIONAL FACTORS
   ELIMINATED SOME CANDIDATES FROM
   CONSIDERATION
---------------------------------------------------------- Chapter 4:6

Several bases (see table 4.6) were screened for possible closure but
not selected because of operational considerations, environmental
issues, and closure costs. 



                                    Table 4.6
                     
                      Summary of Estimated Costs and Savings
                     for Air Force Bases Not Recommended for
                              Closure or Realignment

                      (Fiscal year 1996 dollars in millions)

                                               Recurring
                        One-time  6-year net      annual                 20-year
Installation             costs\a   savings\b   savings\c  ROI\ years        NPV\
--------------------  ----------  ----------  ----------  ----------  ----------
Beale AFB                 $199.0       $62.6       $52.6           3      $566.9
Ellsworth AFB               40.7       247.7        63.4           1       849.1
Scott AFB                  239.6        11.2        53.6           5       528.3
Cannon AFB                  72.9       118.8        40.2           2       501.8
Holloman AFB               257.2        36.7        65.1           4       663.2
Moody AFB                   97.5        85.6        36.9           2       438.4
Kelly AFB                  652.8     (558.7)        70.4          10       179.5
McClellan AFB              513.7     (366.1)        95.8           5       607.0
Hanscom AFB                421.3     (370.2)        50.5           9       158.0
Los Angeles AFB            449.7     (375.8)        49.5          10       142.0
================================================================================
Total                   $2,944.4  ($1,108.2)      $578.0                $4,634.2
--------------------------------------------------------------------------------
Note:  Totals may not compare to those in DOD's report due to
rounding. 

\a This represents unique one-time costs to implement the
recommendation. 

\b This represents net savings within the 6-year implementation
period. 

\c Projected recurring annual savings after the 6-year period. 

As part of our analysis of the recommendations, we obtained
information about the reasons that potential candidates were not
selected for closure or realignment.  Some information came from the
Executive Group's minutes, while other information came from
extensive discussions with Air Force Working Group officials. 


      OPERATIONAL AIRCRAFT AND
      MISSILE BASES
-------------------------------------------------------- Chapter 4:6.1

The Air Force did not recommend closing any operational-type (large
and small aircraft/missile) bases, even though its analysis indicated
a potential excess of eight of these bases.  In rating and tiering
the bases, the Air Force placed only six bases in the lowest, or
third, tier.  Although these bases, as well as some from the second
tier, were extensively reviewed as closure candidates, the Secretary
of the Air Force did not recommend any for closure for operational
and cost reasons. 


         LARGE AIRCRAFT AND
         MISSILE BASES
------------------------------------------------------ Chapter 4:6.1.1

Three large aircraft bases--Ellsworth AFB (which bases the B-1
bomber), Grand Forks AFB, and Scott AFB, Illinois--were rated in the
bottom tier and were considered for closure.  In discussions between
the Air Force Secretary and the Executive Group regarding Ellsworth,
concerns were raised about overloading Dyess AFB, Texas, the other
B-1 bomber base.  Other concerns were the placement of all B-1 assets
at a single location and provisions in the Strategic Arms Reduction
Treaty that preclude collocation of nonnuclear-capable aircraft (the
B-1) with nuclear-capable aircraft (the B-52).  The Secretary and the
Executive Group were also concerned about the high one-time costs
($250 million) to close Scott and the disruption of the U.S. 
Transportation Command's activities at the base.  For Grand Forks, a
Working Group official said that the Executive Group's analyses and
discussions with the Secretary centered on finding a base that could
receive Grand Forks' 48 KC-135 aircraft as a single package. 
Consideration was given to moving the aircraft to McGuire AFB, New
Jersey, but air quality issues there precluded the action.  Also,
Grand Forks is a prime location for single integrated operational
plan (SIOP) purposes. 

After discussing the bases in the bottom tier, the Secretary looked
at candidate bases from the middle tier, giving primary attention to
Minot AFB; Beale AFB, California; and Malmstrom AFB.  According to a
Working Group official, Minot AFB could have been closed; however,
the Air Force does not intend to decrease its B-52 inventory, as
planned, and a suitable receiver base could not be found.  For
example, moving Minot's B-52 aircraft to other bases like Beale
raised air quality environmental concerns, as well as concerns over
the high cost ($183 million) to move the mission.  Beale AFB was
cited as a potential base to receive a special operations wing
returning from overseas.  The Executive Group minutes point out that
closing Beale and moving its U-2 aircraft would create problems of
overloading aircraft and encroachment problems at the potential
receiving base (Davis-Monthan AFB, Arizona).  The Working Group
official also said that the importance of the Minuteman Missile Field
at Malmstrom AFB precluded it from being a closure candidate.  The
Secretary also discussed the other second tier bases (Offutt AFB and
McGuire AFB) but eliminated them from further consideration because
of their missions.  The Secretary did recommend the realignment of
Grand Forks and Malmstrom AFBs. 


         SMALL AIRCRAFT BASES
------------------------------------------------------ Chapter 4:6.1.2

Three small aircraft bases were rated in the bottom tier--Cannon AFB,
New Mexico; Holloman AFB, New Mexico; and Moody AFB, Georgia. 
According to Executive Group minutes, potential receiving bases (Hill
AFB, Utah; Nellis AFB, Nevada; and Shaw AFB, South Carolina) have
operational constraints affecting their ability to accommodate
aircraft and meet range and training requirements.  According to the
minutes, Cannon and Holloman had airspace and range capabilities that
would be difficult to replace if both closed.  Holloman, according to
a Working Group official, had the unique mission of maintaining the
F-117 aircraft and had the airspace and training ranges needed to
support that aircraft; therefore, it could not be considered a
candidate for closure.  Also, relocating its aircraft to other
locations (Nellis and Shaw) would overload their base facilities. 
Moreover, according to a Working Group official and Executive Group
minutes, moving aircraft from Moody AFB to other locations would
cause air congestion problems and overloading of facilities at the
prospective receiving bases (Hill and Shaw AFBs).  Finally, the four
active F-16C LANTIRN-equipped squadrons at Moody AFB would require a
receiving base to be able to support the aircraft's specialized
equipment. 

After discussing the bases in the bottom tier, the Secretary looked
to the middle tier bases for closure options, but basically the same
operational impacts and concerns surfaced.  From these analyses, the
Secretary concluded that no small aircraft bases could be closed. 


         PRODUCT CENTER AND
         LABORATORY BASES
------------------------------------------------------ Chapter 4:6.1.3

Two bases were discussed as candidates but not selected--Los Angeles
AFB, California, and Hanscom AFB.  According to a Working Group
official, the bases were not recommended for closure or realignment
because they are collocated with Federally Funded Research and
Development Centers (Aerospace Corporation and MITRE Corporation). 
Closing either base would be costly because its respective
corporation would also have to be moved.  Furthermore, the Air Force
did not want to lose its relationship with the high-technology
industry close to those bases. 


   NEED TO REASSESS CLOSURE OF
   NEWARK AFB AEROSPACE GUIDANCE
   AND METROLOGY CENTER
---------------------------------------------------------- Chapter 4:7

In our December 9, 1994, report entitled Aerospace Guidance and
Metrology Center:  Cost Growth and Other Factors Affect Closure and
Privatization (GAO/NSIAD-95-60), we noted that the justification for
closing Newark AFB/Aerospace Guidance and Metrology Center (AGMC) is
not clear for several reasons.  Among other things, one-time closure
costs had doubled and may still be underestimated.  As a result, the
payback period has increased to at least 17 years and as much as over
100 years--depending on the assumptions used.  Moreover, projected
costs of conducting post-privatization operations could exceed the
cost of current Air Force operations and reduce or eliminate
projected savings.  This report also pointed out other closure and
privatization problems that created uncertainty about the feasibility
of the Air Force's planned action. 

Although DOD generally concurred with our report, the Department
responded on March 8, 1995, that there was currently not enough data
to conclude that privatizing the Center's workload in place is not a
feasible and cost-effective alternative.  DOD noted that the Air
Force strategy is to continue moving toward privatization while
concurrently reassessing organic alternatives, such as moving all the
AGMC workloads to other Air Force and interservice depots.  DOD also
noted the Air Force has engaged a contractor to provide an
independent cost assessment of alternative approaches to
privatization-in-place and an independent certification of the
privatization source selection board methodology/conclusions. 
However, our review of the contractor's recent assessment of the
costs of privatizing the Center's workload and of moving the workload
to other organic depots indicates that the costs of both of these
options may be much higher than continuing the operation of the
Center as a government facility. 


   CONCLUSIONS AND RECOMMENDATIONS
---------------------------------------------------------- Chapter 4:8

The Air Force is recommending the closure/disestablishment or
realignment of 23 installations, including 7 reserve bases, plus 7
changes to prior BRAC decisions.  Only five of the closures and
disestablishments affect active-duty facilities; no operational bases
are recommended for closure.  The Air Force's recommendations to
realign rather than close any maintenance depots did not appear to be
well thought out or adequately supported.  They do not fully address
the problem of significant excess capacity in the depot system, and
it is not clear that the realignments will achieve indicated savings. 
Moreover, they also appear to be adding work to depots that are being
downsized outside the BRAC process. 

The realignment of Kirtland AFB is estimated to save the Air Force
money, but a significant amount of these savings would be offset by
added costs to DOE.  Also, questions arise concerning whether the Air
Force gave adequate consideration to security and operational issues
at Kirtland before reaching its realignment decision.  Additionally,
as the Commission is aware, the realignment of the Grand Forks AFB
depends on a DOD decision to retain ballistic missile defense
options.  Likewise, community concerns regarding the Reese AFB
closure were not fully resolved at the time we completed our work. 
These issues will need to be addressed by the Commission before a
final decision is reached. 

The Air Force gave great weight to preliminary closing costs before
rating its bases, which influenced the relative rating of bases.  The
impact of closure costs on BRAC decisions cannot be fully assessed,
but their greater impact may have been on eliminating bases from
closure consideration.  Documentation of the Air Force's process was
too limited for us to substantiate the extent of its deliberations
and analyses; this made it difficult to verify what had actually
transpired. 


      RECOMMENDATIONS TO THE
      SECRETARY OF THE AIR FORCE
-------------------------------------------------------- Chapter 4:8.1

If the Congress should mandate future BRAC rounds and DOD retains its
eight selection criteria, we recommend that the Secretary of the Air
Force more fully document all analyses and decisions, including cost
data. 


      RECOMMENDATIONS TO THE
      COMMISSION
-------------------------------------------------------- Chapter 4:8.2

Given the uncertainty associated with the Air Force's recommendation
regarding its depots, we recommend that the BRAC Commission, at a
minimum, require more complete plans for eliminating excess capacity
and infrastructure from the Air Force before approving the
recommendation.  Also, we recommend that the Commission closely
examine expected cost savings and operational impacts associated with
the Kirtland AFB realignment.  Additionally, we recommend that the
Commission have DOD identify those closures and realignments that
have costs and savings implications that affect other federal
agencies. 

Further, in light of the available evidence indicating that closure
of AGMC may not be cost-effective, we recommend that the Commission
consider requiring that DOD report to the Commission on the
comparative cost-effectiveness of both options under consideration,
privatization-in-place or the transfer of workload to other DOD
depots, versus the current cost of performing AGMC operations. 


THE ARMY'S PROCESS AND
RECOMMENDATIONS WERE GENERALLY
SOUND, WITH COST CONSIDERATIONS
ELIMINATING SOME POTENTIAL
CLOSURES AND REALIGNMENTS
============================================================ Chapter 5

The Army is recommending the closure and realignment of 44
installations, including 3 leases of facilities, and 15 minor sites. 
These recommendations incorporate several alternatives provided by
cross-service groups.  The Army's process for evaluating and
recommending installations for closure or realignment was generally
sound and well documented.  However, we are highlighting some
recommendations for the Commission's attention because of a variance
in how they were assessed compared to others or because of other open
issues. 

Implementation costs were a significant factor in the Army's
decision-making, but only after military value analyses had
identified candidate installations for study.  At the same time, some
candidate installations/facilities ranked relatively low in military
value and had the potential for long-term savings, but they were
excluded from closure or realignment consideration because of closing
costs and other considerations. 


   FEW CHANGES WERE MADE TO THE
   ARMY'S SOUND PROCESS
---------------------------------------------------------- Chapter 5:1

The Army completed its BRAC 1995 review using basically the same
process it had used in prior rounds.  Only a few changes were made to
the process for BRAC 1995, including (1) the basing categories for
some facilities to provide a different grouping for a better
assessment of relative military value and (2) a more direct and clear
link between the Army's data calls and DOD's four military value
selection criteria.  The Army's process for evaluating and
recommending installations for closure and realignment generally
complied with legislation and OSD policy guidance, was well
documented, was supported by generally accurate data, and appeared
reasonable.\1 Although explainable, there was some variance in the
Army's application of its process for two groups of installations and
facilities. 

In keeping with a suggestion from the 1993 BRAC Commission's report,
the Army also established a separate review category for leased
facilities.  All leases (including groups of leases in the same
headquarters and same geographical area) costing more than $200
thousand per year were identified as study candidates.  However, the
Army's military value analysis for leased facilities was not done in
the same way as it was for installations.  To assess the military
value, an installation assessment was coupled with the operational
requirements in the stationing strategy.  In contrast, the stationing
strategy alone provided the basis for the military value of leased
facilities.  One tenet of the stationing strategy was to minimize the
use of leased facilities.  The Army did not prepare installation
assessments for leased facilities because it believed that they do
not have the same measurable attributes and characteristics as
installations and were not competing against each other for retention
purposes. 

The Army also included within its BRAC process a review of minor
sites, many of which contained less than 100 acres and had few, if
any, tenants or employees.  These sites were identified by the major
commands as being excess to their needs and of low military value. 
These sites were added during the latter stages of the Army's BRAC
process and also underwent a different review from the normal
military value assessment completed under the Army's BRAC process. 
Once identified as excess to the Army's needs and of low military
value by the major commands, the Army's BRAC group evaluated the
impact of closing each site on operations and the ROI. 

We monitored all aspects of the decision process from the beginning. 
We had access to and reviewed key documents, discussing aspects with
key officials, and observed the process as it occurred.  We also sat
in on selected meetings and were able to verify that the Army was
following its established policies and procedures.  As a result, we
were able to track the analysis of each installation through the
process.  The Army gave priority consideration to military value
criteria, as required, and its decision-making appeared logical,
consistent, and fair.  Some installations were not selected for
closure, based on closing costs and/or operational considerations,
even though they ranked relatively low in military value compared
with other installations in the respective installation categories. 

An important part of the Army's process, as in prior BRAC rounds, was
periodic consultation with senior military and civilian Army
officials.  These key Army officials were involved in each phase of
the process.  Deliberative minutes were kept for each of the meetings
with the key officials.  These minutes documented key decisions made
during the process relative to the Army's installations.  The end
result was the closure and realignment recommendations made by the
Secretary of the Army to the Secretary of Defense. 


--------------------
\1 The Army Audit Agency (AAA) provided comprehensive review and
oversight of each segment of the process, to include reviewing the
primary data sources and analytical approaches; this included
checking COBRA entries against source documents.  In all cases where
discrepancies were found, corrections were made.  None of the
discrepancies, however, were considered material or affected any of
the recommended closures or realignments. 


   IDENTIFYING CLOSURE AND
   REALIGNMENT CANDIDATES
---------------------------------------------------------- Chapter 5:2

The Army initially identified 112 installations/facilities (including
the 15 leases of facilities), which it placed in 14 categories for
initial screening in BRAC 1995.  The Army later added 20 minor sites
for closure or realignment consideration as a separate category. 
Selected installations/facilities were eliminated from further
consideration at various points in the process due to their strategic
importance or continuing operational need.  For example, Fort Bragg,
North Carolina, was excluded from further study; it has a high
military value because it is the home of the 82nd Airborne Division
and is located near Pope AFB. 

By the time the Army completed its military value assessments, it had
reduced the number of candidates for further consideration to 45
installations and 15 leases of facilities.  At this point, the Army
selected candidates that were relatively low in military value and
that the Army's stationing strategy indicated could be excess.  The
documentation for this part of the process clearly supported the
Army's conclusions concerning the candidates selected.  Table 5.1
shows the installation categories and the number of installations and
candidates in each category. 



                          Table 5.1
           
           Army's BRAC Installations, by Category,
             and Potential Candidates for Closure

                                     Number of       Closure
Installation category            installations    candidates
------------------------------  --------------  ------------
Maneuver areas                              11             4
Major training areas                        10             8
Command and control/                        15            11
 administrative support
Training schools                            14             5
Professional schools                         4             0
Ammunition production                        8             0
Ammunition storage                           8             5
Commodity                                    9             3
Ports                                        3             2
Depots                                       4             2
Proving grounds                              4             1
Medical centers                              3             1
Industrial facilities                        4             3
============================================================
Subtotal                                    97            45
Leased facilities                           15            15
============================================================
Total                                      112            60
------------------------------------------------------------
Table 5.1 does not include the 20 minor sites, which were not
originally aligned with any of the BRAC installation categories. 
Also, the Army did not identify candidates in the professional
schools and ammunition production categories because it believed that
these categories had no excess capacity.  These conclusions were
supported by the stationing strategy, which said that none of the
schools/installations in these categories should be closed. 

Once the candidates were selected and approved by the Secretary of
the Army and the Army Chief of Staff, alternatives or action
scenarios were identified and examined for their viability to
facilitate implementing potential closures or realignments.  The
scenarios were derived from several sources such as force structure
decisions, the Army's stationing strategy, and major Army command
recommendations. 

For each scenario, the Army analyzed (1) affordability, (2) economic
impact, (3) environmental impact, (4) community impact, and (5) the
ability to complete closure or realignment within 6 years as
required. 


   ARMY'S 1995 BRAC
   RECOMMENDATIONS WERE LARGELY
   WELL SUPPORTED
---------------------------------------------------------- Chapter 5:3

The Army recommended 44 closures and realignments (26 installations,
3 leases of facilities, and 15 minor sites) to the Secretary of
Defense.  From our analysis of available documentation, we concluded
that the candidates recommended for closure or realignment were
generally among those ranking lowest in military value in their
respective categories.  However, the Commission may want to more
closely examine three of the Army's recommendations.  One involves
the recommended closure of an Army base previously rejected in two
prior BRAC rounds.  The other two involve realignments.  One
realignment involves a change in a prior BRAC decision involving the
consolidation of missile maintenance functions at a single location. 
The other realignment, while appearing sound, is caught up in debate
over the accuracy of some data.  Table 5.2 shows the installations
recommended for closure or realignment by installation category. 



                          Table 5.2
           
                 Army BRAC Recommendations by
                    Installation Category

                               Number
                          recommended  Installations
                          for closure  recommended for
                                  and  closure or
Installation category     realignment  realignment
---------------------  --------------  ---------------------
Maneuver areas                      0  None
Major training areas                6  Fort Chaffee
                                        Fort Dix
                                        Fort Greely
                                        Fort Hunter Liggett
                                        Fort Indiantown Gap
                                        Fort Pickett
Command and control/                8  Fort Buchanan
 administrative                         Fort Hamilton
 support                                Kelly Support
                                        Center
                                        Fort Meade
                                        Price Support
                                        Center
                                        Fort Ritchie
                                        Fort Totten
                                        Selfridge
Training schools                    2  Fort Lee
                                        Fort McClellan
Professional schools                0  None
Ammunition production               0  None
Ammunition storage                  3  Savanna Depot
                                        Seneca Depot
                                        Sierra Depot
Commodity                           0  None
Ports                               1  Bayonne
Depots                              2  Letterkenny
                                        Red River
Proving grounds                     1  Dugway
Medical centers                     1  Fitzsimons
Industrial facilities               2  Stratford Plant
                                        Detroit Tank Plant
Leased facilities                   3  Aviation and Troop
                                        Command
                                        Army Concepts
                                        Analysis Agency
                                        Army Information
                                        Systems Software
                                        Command
Minor sites                        15  See app. IV, table 3.
------------------------------------------------------------

      RECOMMENDED CHANGE TO A
      PREVIOUS BRAC DECISION
-------------------------------------------------------- Chapter 5:3.1

The Army recommended one change to a 1991 BRAC Commission
recommendation regarding "Tri-Service Project Reliance." This change
would cancel the relocation of environmental and occupational
toxicology research from Fort Detrick, Maryland to Wright-Patterson
AFB.  The Army now recommends relocating the health advisories
environmental fate research and military criteria research functions
of the Environmental Quality Research Branch to the Army
Environmental Hygiene Agency, Aberdeen Proving Ground, Maryland, and
keeping the remaining functions at Fort Detrick.  The Army has
determined that implementing the 1991 recommendation gives it no
operational advantage.  In addition, the Army found that significant
new construction will be avoided because Aberdeen Proving Grounds has
facilities available.  We found no basis to question the Army's
assumptions. 


   OPEN ISSUES THAT SHOULD BE
   ADDRESSED BY THE BRAC
   COMMISSION
---------------------------------------------------------- Chapter 5:4

In our examination of the Army's recommendations, a question was
raised about Fort McClellan being proposed for closure in BRAC 1995
after previously having been rejected for closure by the BRAC
Commission.  Also, some questions were raised concerning the accuracy
of some data used in the military value analysis for ammunition
storage installations.  In addition, concerns were expressed
regarding the recommendation to realign Letterkenny Army Depot. 
These issues are summarized below. 


      FORT MCCLELLAN
-------------------------------------------------------- Chapter 5:4.1

Of the Army's closure recommendations, only one involves an
installation the BRAC Commission previously rejected for closure--
Fort McClellan.  Unlike its prior recommendations, the Army's BRAC
1995 recommendation would relocate the Chemical Defense Training
Facility along with the Chemical School to Fort Leonard Wood.  In
BRAC 1993, the Army planned to keep the training facility at Fort
McClellan but move the Chemical School to Fort Leonard Wood.  The
1993 BRAC Commission had questioned the wisdom of separating the
training facility from the Chemical School. 

The report of the 1993 BRAC Commission states that if the Secretary
of Defense wanted to move the Chemical School and the training
facility in the future, the Army should obtain the required permits
and certification for the new site before the 1995 BRAC process. 
However, the Army did not officially begin this process until it was
certain that Fort McClellan would be recommended for closure. 
According to the Secretary of the Army, obtaining the required
permits before Fort McClellan was recommended for closure would have
been premature and also would have created unnecessary apprehension
among personnel at the base.  The Secretary also stated that if the
permits and certifications cannot be obtained, Fort McClellan will
not be closed. 


      AMMUNITION STORAGE
      INSTALLATIONS
-------------------------------------------------------- Chapter 5:4.2

Community concerns about the development of military value for
ammunition storage installations centered around the accuracy of some
of the information used to score all of the installations. 
Specifically, data in two of the attributes were questioned--
ammunition storage and total buildable acres.  For example, buildable
acres at one facility increased by over 300 percent between BRAC
rounds in 1993 and 1995.  Our follow-up and that of the Army's seem
to support the existence of some data inaccuracies; however, the
correct information has not yet been ascertained.  Army officials
have informed us that they will determine what is correct and make
the necessary adjustments.  Using available data, we performed a
sensitivity analysis (using the lower buildable acre figure from BRAC
1993) to determine the impact of changes and did not notice any
change in the installation rankings.  The Commission may want to
ensure that the corrected data has been obtained and assessed prior
to making a final decision on this recommendation. 


      LETTERKENNY ARMY DEPOT
-------------------------------------------------------- Chapter 5:4.3

Concerns regarding the recommendation to realign Letterkenny Army
Depot, Pennsylvania, centered around the completeness of closure cost
data and the extent that the current BRAC recommendation represents a
change from the 1993 BRAC decision to consolidate all tactical
missile maintenance at one location.  Concerns have been expressed
that costs associated with the proposed realignment of the tactical
missile maintenance mission from Letterkenny to Tobyhanna Army Depot,
Pennsylvania, are understated and could be much greater than
initially indicated.  We found that some one-time moving and site
preparation costs were not included but currently appear to be
relatively small, between $3 million to $5 million.  Assuming no
significant additional costs are identified, the inclusion of the $3
million to $5 million in the COBRA would have no impact on the
current ROI. 

Concerns also have been expressed that the 1995 recommendation
represents some departure from the plan for consolidating tactical
missile maintenance at one site.  The 1995 recommendation would split
up some of the work by transferring the missile guidance system
workload to Tobyhanna while preserving the tactical missile
disassembly and storage at Letterkenny.  Maintenance on the
associated ground support equipment, such as trucks and trailers,
would be done at Anniston Army Depot, Alabama.  There are differences
of opinion concerning the impact of separating these functions on the
concept of consolidated maintenance.  The Commission may want to
examine this issue further. 


   IMPACT OF CROSS-SERVICE GROUP
   ALTERNATIVES ON ARMY DECISIONS
---------------------------------------------------------- Chapter 5:5

In addition to completing affordability and other analyses of its
study candidates, the Army assessed various alternatives suggested by
the five functional cross-service groups.  The Army analyzed only
those cross-service group alternatives in which the Army was the
"losing" military department, that is, an Army activity/function
would be shifted to another service.  In analyzing its cross-service
group alternatives by functional category, the Army concluded the
following: 

  Test and Evaluation.  Each alternative represented minor workload
     shifts and offered no opportunity for a base closure or
     realignment.  It therefore rejected the alternatives. 

  Laboratories.  Each alternative represented minor workload shifts
     and offered no opportunity for a base closure or realignment. 
     It therefore rejected the alternatives. 

  Undergraduate Pilot Training.  No alternatives were presented where
     the Army was the losing department.  Therefore, no Army analysis
     was done. 

  Medical Treatment Facilities.  The Army accepted three of the six
     alternatives proposed by the cross-service group, including
     closure of Fitzsimmons Army Medical Center and the realignments
     of Kenner (Fort Lee) and Kimbrough (Fort Meade) Army hospitals
     to clinics.  The Army modified the alternative to realign Noble
     Army Hospital (Fort McClellan) and recommended closure instead,
     since the Army is recommending the closure of Fort McClellan. 
     The Army cited operational considerations in not accepting the
     remaining two alternatives. 

  Maintenance Depots.  The cross-service group recommended the
     realignment of 17 work packages that required Army analysis as
     the losing service,\2 and 2 closures.  The Army accepted 3 work
     packages, modified 6 others, and rejected 8 due to either cost
     or operational reasons.  The Army's own recommendations to close
     Letterkenny and Red River depots coincided with alternatives of
     the cross-service group. 


--------------------
\2 A work package contains the proposed transfer of a defined body of
work. 


   COST AS A FACTOR IN ARMY
   DECISIONS
---------------------------------------------------------- Chapter 5:6

Army installations/facilities selected for closure or realignment
generally had relatively small one-time closing costs and provided
almost immediate savings after completing the closure.  In fact, the
estimated cost of closure or realignment was one of the factors that
limited the size of the Army's recommendation list.  For those
facilities/installations selected for further study but not
recommended for closure or realignment, the reasons most frequently
cited by the Army were cost and operational requirements. 

To execute its 1995 BRAC actions, the Army was guided in its
decisions by a $729-million budget for the 6-year implementation
period.  The Army exceeded the planning budget by approximately $400
million, for a total cost of $1.1 billion.  Although costs were a
factor in the decision-making process, we found no evidence, based on
our review of the documentation and our exposure to the process, that
the study group withheld any potential recommendations from the
Secretary of the Army because of costs.  The Army had no minimum
financial criteria for closing or realigning an installation.  Each
was considered on its own merits.  Nevertheless, a ROI during the
6-year period was viewed as favorable.  In fact, recommended actions
for each of the candidates were briefed to the Secretary of the Army
for his approval or disapproval.  Table 5.3 summarizes estimated
costs and savings resulting from Army BRAC recommendations. 



                                    Table 5.3
                     
                      Estimated Costs and Savings Resulting
                          From Army BRAC Recommendations

                      (Fiscal year 1996 dollars in millions)

                                               Recurring
                        One-time  6-year net      annual                 20-year
Installation             costs\a   savings\b   savings\c   ROI years         NPV
--------------------  ----------  ----------  ----------  ----------  ----------
Chaffee                     $9.6       $39.4       $13.5           1      $168.2
Dix                         19.4       112.2        38.3           1       477.9
Greely                      22.7        43.0        19.0           1       224.8
Hunter Liggett               6.5        11.7         5.5           1        64.4
Indiantown                  12.7        66.6        22.5           1       281.5
Pickett                     25.5        41.1        20.7   Immediate       240.6
Buchanan                    74.4      (49.6)         9.6           7        45.4
Hamilton                     2.1         3.2         7.2   Immediate        74.0
Kelly                       35.7      (21.9)         5.0           6        27.5
Fort Lee                     2.1        15.5         3.7           1        50.5
Fort Meade                   1.6        16.4         3.5           1        49.5
Price                        3.6        35.5         8.5   Immediate       116.3
Ritchie                     92.8        82.9        65.1           1       712.1
Totten                       3.7         0.1         1.7           1        16.8
Selfridge                    5.3        47.3         9.8   Immediate       139.7
McClellan                  259.1     (122.0)        44.8           6       315.9
Savanna                     37.8      (12.2)        12.7           2       111.9
Seneca                      14.9        34.0        21.5   Immediate       241.9
Sierra                      14.1        54.5        28.8   Immediate       333.0
Bayonne                     44.1       (7.6)        10.1           5        90.1
Letterkenny                 50.3       206.6        77.8   Immediate       952.2
Red River                   59.6       313.1       123.5   Immediate     1,497.3
Dugway                      25.4        61.0        25.6           1       306.7
Fitzsimons                 102.9       179.1        83.6   Immediate       983.2
Stratford                    2.1        23.9         5.9   Immediate        79.7
Detroit Tank Plant           1.4         7.9         3.1   Immediate        38.2
================================================================================
Subtotal                  $929.4    $1,181.7      $671.0                $7,639.3
Minor installations         15.6        12.6         6.6                    72.5
Leases                     155.2         5.7        47.6                   468.2
Redirect                     0.3         4.5         0.0   Immediate         4.1
================================================================================
Total $                  1,100.5    $1,204.5      $725.2                $8,184.1
--------------------------------------------------------------------------------
Note:  Totals may not compare to those in DOD's report due to
rounding and other adjustments to correct minor errors. 

\a This represents unique one-time costs to implement the
recommendation. 

\b This represents net savings within the 6-year implementation
period. 

\c Projected recurring annual savings after the 6-year period. 


   COSTS AND OTHER FACTORS
   ELIMINATED SOME CLOSURE
   CANDIDATES
---------------------------------------------------------- Chapter 5:7

Senior Army leadership exercised operational, financial, military,
and other judgments in making ultimate decisions not to recommend
some installations for closure.  The Secretary of the Army eliminated
some candidates having (1) sizable cost savings but significant
up-front closing costs, (2) relatively low military value, and/or (3)
operational value considerations precluding their closure.  Table 5.4
summarizes cost and savings information for selected Army
installation/facilities studied but not recommended for closure or
realignment. 



                                    Table 5.4
                     
                     Estimated Costs and Savings for Selected
                         Army Installations Excluded From
                                  Consideration

                      (Fiscal year 1996 dollars in millions)

                                               Recurring
                        One-time  6-year net      annual                 20-year
Installation             costs\a   savings\b   savings\c   ROI years         NPV
--------------------  ----------  ----------  ----------  ----------  ----------
Drum                      $405.3    $(127.2)      $121.3           4    $1,070.6
Riley                      690.2     (413.4)       110.8           7       688.4
Richardson                 392.8     (266.4)        56.3           8       300.4
Wainwright                 390.8     (280.9)        48.5          10       213.1
A.P. Hill                    5.0        45.5        14.1   Immediate       180.1
McCoy                      119.5       206.9        95.4           1     1,121.6
Gillem                      65.1      (16.1)        15.0           5       129.3
Meade                      653.9     (499.2)        64.2          12       149.9
Monroe                      93.9      (24.4)        23.8           2       208.3
Eustis/Story               480.9     (322.8)        48.4          11       152.7
Lee                        716.9     (606.9)        32.1          35     (273.3)
Leonard Wood               623.9     (348.8)        82.6           8       462.9
Presidio of Monterey       429.3     (392.3)        13.5          86     (246.2)
Pueblo                      17.0         2.6        29.1   Immediate       290.3
Umatilla                    10.0         2.9        19.0   Immediate       190.1
Cold Laboratory             52.9      (41.4)         4.1          18       (0.5)
Natick                     160.4      (77.1)        26.6           7       185.3
Picatinny                  314.3     (156.3)        48.0           8       317.2
Oakland                     34.6        25.2        16.1           2       179.9
Lima                         3.0        20.4         6.2   Immediate        79.7
================================================================================
Total                   $5,659.7  ($3,269.7)      $875.1                $5,399.8
--------------------------------------------------------------------------------
Note:  Totals may not add due to rounding. 

\a This represents unique one-time costs to implement the
recommendation. 

\b This represents net savings within the 6-year implementation
period. 

\c Projected recurring annual savings after the 6-year period. 

As part of our analysis of the recommendations, the following are
brief summaries of the reasons that potential candidates were not
selected for closure or realignment. 


      MANEUVER AREAS
-------------------------------------------------------- Chapter 5:7.1

Forts Drum, New York, and Riley, Kansas.  The Army considered these
two installations because of their relatively low military value as
maneuver installations and the Army's desire to do a broader
assessment of this category.  While estimated savings from closing
these installations were significant, so were the associated closing
costs.  Citing the overall importance of maneuver installations to
station and train ground forces and to support the stationing
strategy, along with the high costs associated with closure, the Army
decided that Forts Drum and Riley should remain open. 

Forts Richardson and Wainwright, Alaska.  The Army's stationing
strategy seems to suggest that only one base is needed in Alaska to
support one maneuver brigade and support forces.  Initial Army
studies show that keeping Fort Wainwright open was the better choice
and that Fort Richardson would therefore be the best candidate for
closure.  The strategy stated that as the maneuver division is
reduced to a maneuver brigade, the installation can be structured to
meet the specific needs of the brigade and supporting forces.  Each
can support one light brigade without additional military
construction.  However, the Army later decided that due to strategic
requirements in the Pacific and high closure costs, Fort Richardson
would remain open. 


      MAJOR TRAINING AREAS
-------------------------------------------------------- Chapter 5:7.2

Forts AP Hill, Virginia, and McCoy, Wisconsin.  The Army's stationing
strategy emphasized the need to reduce the number of major training
areas and focused primarily on reserve component training support. 
As a result, Forts AP Hill and McCoy were chosen as candidates for
further study.  The Army decided that their closure was operationally
infeasible due to the training requirements of the reserve
components.  It should be noted that six major training installations
are being recommended for closure or realignment. 


      COMMAND AND
      CONTROL/ADMINISTRATIVE
      SUPPORT INSTALLATIONS
-------------------------------------------------------- Chapter 5:7.3

Fort Gillem, Georgia.  Because of its low military value, Fort Gillem
was selected as a candidate for closure.  The Army concluded that
Fort Gillem must remain open because of the operational support it
provides to Fort McPherson, Georgia, and the high closure costs.  The
1993 BRAC Commission considered Fort Gillem as a potential addition
to DOD's list but ultimately concluded it should remain open. 

Fort Meade, Maryland.  Because of Fort Meade's large non-DOD
population and its low operational value to the Army, its study for
closure was suggested by the stationing strategy.  Due to the high
costs associated with closure and its importance to the National
Capital Region, its close proximity to Washington, D.C., and the
number of tenants, the Army decided to keep it open.  However, the
Army recommended realigning Fort Meade by downsizing its hospital to
a clinic. 

Fort Monroe, Virginia.  In BRAC 1993, the Secretary of the Army
deleted Fort Monroe from closure consideration, citing operational
reasons.  However, other information suggested that high
environmental clean-up costs played a part in this decision.  The
environmental concerns did not conform with DOD policy guidance,
which states that environmental restoration costs are to be expected
whether a base closes or not; therefore, they are not a basis for
closure decisions.\3 The 1993 BRAC Commission added Fort Monroe to
its list of candidates but did not direct its closure.  The
Commission did ask the Army to investigate the extent of unexploded
ordnance at Fort Monroe.  The Army completed the requested study and
found that unexploded ordnance posed a minimal risk to the public
health and environment if identified sites were left undisturbed. 
The Army estimated the cost to safely remove all hazards to a 10-foot
depth at about $22 million. 

In BRAC 1995, the Army's stationing strategy emphasized that the
Training and Doctrine Command headquarters (currently located at Fort
Monroe) should be stationed in the joint environment of the
Tidewater, Virginia, region to allow immediate access to doctrine
development agencies of other services and joint-service
organizations in the region.  However, Fort Monroe ranked relatively
low in military value and was still recommended for further study. 
The Army did study closing Fort Monroe and moving the majority of its
tenants to Fort Eustis.  This scenario provided the basis for savings
estimates shown in table 5.4.  Ultimately, the Army concluded that
Fort Monroe was well suited and well situated to meet its mission and
that military judgment indicated that Fort Monroe should remain open. 


--------------------
\3 See our report, Military Bases:  Analysis of DOD's Recommendations
and Selection Process for Closures and Realignments
(GAO/NSIAD-93-173, Apr.  15, 1993). 


      TRAINING SCHOOLS
-------------------------------------------------------- Chapter 5:7.4

Forts Eustis/Story, Virginia; Lee, Virginia; Leonard Wood, Missouri;
and the Presidio of Monterey, California.  Fort Eustis/Story, Fort
Lee, and the Presidio of Monterey were rated relatively low in
military value for training schools.  Accordingly, they were selected
for further study.  However, citing the high cost of closure, the
Army decided to keep them open.  Additionally, the Army studied Fort
Leonard Wood because it also was examining the closure of Fort
McClellan and relocation of its schools to Fort Leonard Wood.  It
should be noted that under the recommendations finally adopted, Fort
Leonard Wood became a receiving installation.  Also, the Army
recommended realigning Fort Lee by downsizing its hospital to a
clinic. 


      AMMUNITION STORAGE
-------------------------------------------------------- Chapter 5:7.5

Pueblo, Colorado, and Umatilla, Oregon, Depot Activities.  Because of
their low military value, each of these depot activities was selected
for further study.  However, because their missions involve
demilitarizing chemical agents, the Army would be unable to close
either of them before the deadline of the 1995 Commission, which is
2001.  Therefore, the Army discontinued its study of these
installations. 


      COMMODITY INSTALLATIONS
-------------------------------------------------------- Chapter 5:7.6

Cold Regions Research and Engineering Laboratory, New Hampshire. 
Because this laboratory ranked relatively low in the Army's military
value assessment, it was selected for further study.  The only reason
cited by the Army for not closing this installation was the high
closing costs. 

Natick Research, Development, and Engineering Center, Massachusetts. 
Natick's research focuses on the soldier and soldier support systems. 
Because of its relatively low military value, the Army reviewed the
operational and financial impact of transferring Natick and
associated research activities and elected to discontinue further
study of closure/realignment options.  Natick ultimately gained
functions related to soldier systems relocating from the Aviation and
Troop Command in St.  Louis, Missouri. 

Picatinny Arsenal, New Jersey.  Picatinny's mission is to conduct and
manage the research, development, and engineering for assigned
armaments and ammunition systems.  Picatinny scored high in the
installation assessment, but it ranked low in military value. 
According to the Army, its facilities are older and require
substantial funds for renovation or replacement.  In addition, it is
a single-purpose installation that cannot support integrated
life-cycle functions.  The closure of Picatinny was found to be
costly. 


      PORTS
-------------------------------------------------------- Chapter 5:7.7

Oakland Army Base, California.  Oakland is an Army-owned terminal
facility that supports Alaska, Hawaii, and the Pacific and Far East
theaters of operation.  It provides secure water terminal facilities
for the rapid movement of forces into theaters of operation around
the world during conflicts or fast-breaking contingencies.  Because
Oakland's primary capabilities can be duplicated by commercial
activities, it was selected as a candidate for study.  After a review
of available West Coast port activities, the Army decided that
operational risks precluded the closure of Oakland.  However, the
Army did not elaborate on what these risks were.  It only stated that
the availability of West Coast commercial port facilities was
insufficient to meet contingency demands. 


      INDUSTRIAL FACILITIES
-------------------------------------------------------- Chapter 5:7.8

Lima Army Tank Plant, Ohio.  Because of its low military value, Lima
was selected for further study.  Since the Army is recommending the
closure of the Detroit Tank Plant, it decided that the Lima plant
should remain as the only operating tank plant. 


   CONCLUSIONS AND RECOMMENDATIONS
---------------------------------------------------------- Chapter 5:8

The Army's process and recommendations were generally sound, although
some recommendations on leases of facilities and minor sites involved
some variance in the process.  Although there was some logic in the
Army's rationale for these variances, we recommend that the
Commission further assess these actions and make a determination,
under its legislative authority, whether these variances represent
substantial deviation from the selection criteria. 

Also, some questions remain about the accuracy of some data used in
assessing Army ammunition depots.  Therefore, we recommend that the
Commission ensure that the Army's ammunition depot recommendations
are based upon accurate and consistent information and that corrected
data would not materially affect military value assessments and final
recommendations. 

Further, the proposed realignment of Letterkenny Army Depot involves
a change to a prior BRAC decision to consolidate tactical missile
maintenance at a single location.  Some questions exist about the
impact of the realignment on the concept of consolidated maintenance. 
The Commission may want to examine this issue further. 

Finally, the Commission will want to ensure that the Army has met all
permit requirements related to the closure of Fort McClellan. 


THE NAVY'S PROCESS AND
RECOMMENDATIONS WERE SOUND, WITH
COSTS, ECONOMIC IMPACT, AND OTHER
FACTORS ELIMINATING SOME POTENTIAL
RECOMMENDATIONS
============================================================ Chapter 6

The Navy is recommending the closure or realignment of 62 activities,
including 2 leases and 18 changes to previous BRAC decisions.  Its
recommendations reflect 20 of the alternatives suggested by the
cross-service groups.  Eliminating excess capacity while maintaining
or improving the average military value of Navy activities was the
principal goal.  The Navy believes that keeping any remaining excess
capacity is prudent because of the uncertainty of future force
structure levels.  Operational, strategic, cost, and civilian job
loss concerns were factors in excluding some candidates from closure
or realignment consideration.  The process employed by the Navy to
arrive at these decisions appeared generally sound and well
documented.  However, we have identified issues associated with
several recommendations that warrant additional attention by the
Commission. 


   THE NAVY'S PROCESS WAS
   STRENGTHENED
---------------------------------------------------------- Chapter 6:1

The Navy conducted a generally thorough and well-documented
evaluation of its basing requirements in developing its 1995
recommendations.  The Navy conducted its 1995 base closure review in
essentially the same manner as it did in 1993.  The Secretary of the
Navy established a group of senior military officers and civilian
executives, the Base Structure Evaluation Committee (BSEC), to
conduct the process and another group, the Base Structure Analysis
Team (BSAT), to assist BSEC. 

The Navy made several improvements to its process for 1995.  One
improvement was that BSAT staff consisted of officers with a greater
variety of operational experience than the staff in previous rounds. 
For example, BSAT had an "industrial" team that included staff with
substantial aircraft depot and shipyard practical experience.  Its
technical centers/laboratories team included the previous director of
a major Navy test and evaluation center.  Most of the 1993 staff had
facilities and civil engineering backgrounds and relied on various
functional commands for technical expertise.  Although this same
expertise was available and used in 1993, the Navy believes having
staff with operational and technical experience on site generally
enhanced the process.  On the basis of our observations of the Navy's
process as it was being conducted, we agree. 

Another improvement in the Navy's process was that BSEC developed
alternative scenarios for review.  The development of alternative
scenarios was a change from the 1993 process, when generally only one
scenario was developed for each recommendation.  In 1993, a scenario
producing the greatest elimination of excess capacity in a
subcategory was developed, and if the ROI was acceptable, that
scenario generally became BSEC's recommendation.  In 1995, BSEC
developed alternatives that reduced excess capacity by varying
degrees and additional alternatives based on increases and decreases
in requirements.  The additional alternatives provided a form of
sensitivity analysis important for areas such as ordnance activities
and shipyards, in which BSEC was uncertain about the level of future
workload requirements.  From the various alternatives, BSEC selected
specific scenarios and collected cost and savings data from
activities affected by the scenarios.  The results of cost and
savings analyses were the basis of final BSEC deliberations in making
closure and realignment recommendations. 

An important part of the Navy's process, as in all prior BRAC rounds,
was periodic consultation with the Navy's most senior military
leaders, including the Commanders of the Atlantic and Pacific Fleets
and Marine Forces, Atlantic and Pacific.  In responding to closure
and realignment scenarios forwarded from BSEC, these officers were
encouraged to suggest alternative receiving sites for
consideration.\1 BSEC also held periodic consultations with the Chief
of Naval Operations, the Commandant of the Marine Corps, and senior
civilian officials in the Department of the Navy.  Policy imperatives
that reflected current and future Navy priorities were presented to
BSEC as guidance for use throughout the BRAC process.  Such
imperatives ensured that a capability deemed vital to the Navy would
not be harmed by the process.  For example, one policy imperative was
that the Navy must be able to drydock large deck and complex Navy
ships, refuel/defuel nuclear-powered ships, and dispose of nuclear
ship reactor compartments.  Such a concern was important for the Navy
as a whole, as it was in previous BRAC rounds. 

The final stage in the Navy's process was a review of BSEC
recommendations by the Secretary of the Navy.  During this review,
the Secretary made a decision to eliminate several BSEC
recommendations due to concerns over the cumulative job losses\2 in
California.  In the case of each of these activities, other
activities in other states were recommended for closure or
realignment that had the same or greater economic impact at the local
level.  In making his decision, the Secretary of the Navy expressed
concern about the statewide impact.  BSEC had previously removed an
activity in Guam from consideration due to economic impact concerns. 
In no case was another activity recommended for closure or
realignment as a substitute for an activity removed for economic
impact reasons. 

The Naval Audit Service reviewed the Navy's 1995 process to ensure
that the data and processes used in developing Navy recommendations
were complete and accurate.  The Audit Service's involvement included
validation of data being submitted by field activities, compliance
with the certification requirements throughout the chain of command,
and accuracy of the analytical process.  We observed Navy auditors
conducting their review at numerous field activities during their
data validation phase and during the BSEC analytical phase.  The
auditors we observed were aggressive in obtaining support for data
submitted through the various chains of command.  They also checked
final COBRA data entries against certified source documents.  The
Naval Audit Service report, issued to the Secretary of the Navy on
February 28, 1995, concluded that the data used in the process was
reasonably accurate and complete and that the analysis was conducted
accurately.\3 We have no basis to dispute the conclusions of the
Naval Audit Service.  Further, we believe the Naval Audit Service's
effort enhanced the Navy's process. 


--------------------
\1 Receiving sites are Navy activities that absorb remaining
equipment and personnel from closing activities. 

\2 Cumulative job losses include those estimated to result from all
the proposed 1995 Navy actions. 

\3 The Navy's Implementation of the 1995 Base Closure and Realignment
Process (Naval Audit Service 026-95, Feb.  28, 1995). 


   IDENTIFYING CLOSURE AND
   REALIGNMENT CANDIDATES
---------------------------------------------------------- Chapter 6:2

The Navy's 1995 base closure review included all activities,
regardless of size.  Although only 140 of over 800 Navy activities
reviewed met the Base Closure and Realignment Act's personnel
threshold, BSEC believed that its review should include all
activities.  BSEC viewed the Navy's infrastructure as "complementary
and mutually supportive"; that is, all Navy activities existed to
support each other as a whole, regardless of their size.  BSEC placed
all Navy activities in 5 categories and 27 functional
subcategories.\4 The Navy's analytical process took place at the
subcategory level.  Table 6.1 displays the Navy's 27 subcategories,
the number of activities in each subcategory, and the activities that
had excess capacity. 



                          Table 6.1
           
                The Navy's BRAC Subcategories

                                     Number of
                                    activities    Activities
                                      assessed   with excess
Subcategory                            in 1995      capacity
------------------------------  --------------  ------------
Naval bases                                 15             X
Marine Corps bases                           3
Operational air stations                    20             X
Reserve air stations                         6             X
Reserve activities                         286             X
Training air stations                        5             X
Training/education                          29             X
Naval aviation depots                        3             X
Naval shipyards                              6             X
Ordnance activities                         11             X
Marine Corps logistics bases                 2             X
Inventory control points                     2             X
Shore intermediate maintenance              14             X
 activities
Fleet and industrial supply                  9             X
 centers
Public works centers                         8             X
Construction battalion centers               2
Naval security group                         4
 activities
Integrated undersea
 surveillance system                         2             X
 facilities
Naval computer and
 telecommunications stations                17
Naval meteorology and                        6
 oceanography centers
Medical activities                         142             X
Dental activities                          104
Military Sealift Command                     2
 activities
Technical centers/labs                      65             X
Administrative activities                   33             X
Engineering field divisions &                9             X
 activities
Supervisors of shipbuilding                 13             X
============================================================
Total                                    818\a
------------------------------------------------------------
\a The Navy review started with a list of 830 activities.  However,
when activities were placed in subcategories, BSAT determined that 12
minor activities had been closed or were closing outside of BRAC. 


--------------------
\4 These categories were operational support, industrial support,
technical centers/laboratories, education/training, and personnel
support/other. 


      CAPACITY AND MILITARY VALUE
      ANALYSES WERE THE BEGINNING
      POINT FOR THE NAVY'S
      DELIBERATIVE PROCESS
-------------------------------------------------------- Chapter 6:2.1

Capacity analysis for each subcategory consisted of estimating the
maximum available capacity and comparing it to the requirements
projected in the future force structure plan.  As in 1993, BSAT
developed different measures of capacity, or measures of throughput,
for each subcategory.  For some subcategories, such as training air
stations, the throughput indicator was the number of students that
could be trained in a year.  Throughput capacity indicators for other
subcategories included direct labor hours, staff years, and spatial
measures (e.g., length or width).  For example, the capacity
indicator for operational air stations was the "squadron module." Air
station capacity was thus characterized as the number of air
squadrons and their necessary support requirements that could be
housed in terms of two hangar types, based on existing Navy
facilities standards.  In some cases, BSAT refined the indicators
used in 1993.  In fact, for operational air stations, BSAT developed
the squadron module as a less complicated way of characterizing the
space available to house air squadrons. 

BSEC began its military value analysis by reviewing the matrices of
questions, by subcategory, used in 1993.  It then revised the
matrices by adding new categories of questions and removing or
modifying others.  BSEC was concerned with keeping questions similar
to those used in 1993 but updating them to reflect changes in the
Navy's infrastructure, force structure, and operational outlook.  We
and the Naval Audit Service found instances where there were
differences in answers to the same questions between the 1993 and
1995 matrices for a specific activity.  However, we generally found
that these differences were due mostly to differing circumstances
between the two time periods or in the methodology required for
developing answers.  For example, during a review of the 1993 and
1995 shipyard military value matrices, we found that the Naval
Shipyard (NSY) Long Beach, California, received credit in 1993 for
conducting overhauls on submarine rescue ships and salvage ships but
did not receive credit in 1995.  Like many of the differences we
found, this was due to the change in circumstances between the two
time periods; in this case, Long Beach is no longer scheduled to
perform work on those types of ships. 

Whether such differences were errors or attributable to the reasons
cited, our analysis showed that they would not change the relative
shipyard military value ranking.  Also, corrections to the relative
military value scores were made throughout the process in response to
errors identified by the Naval Audit Service. 

The Navy used its military value analysis and the results of its
capacity analysis as inputs to its configuration analysis to help
identify the optimum approach to reducing excess infrastructure.  The
average military value of activities in a subcategory was more
important in the Navy's process than the relative military value
score of any one activity.  The Navy's goal was to maintain the
average military value of the remaining activities in each
subcategory after it had identified closure and realignment
recommendations. 


      CONFIGURATION ANALYSIS USED
      FOR DEVELOPING ALTERNATIVES
-------------------------------------------------------- Chapter 6:2.2

As the starting point for the derivation of alternatives aimed at
reducing excess capacity, the Navy used a computer-based model to
compare existing capacity with future requirements and arrive at
solutions for each subcategory that would eliminate excess capacity
to the maximum extent practicable.  This process was known as
configuration analysis.  Rules were applied to the model for each
subcategory for solutions to be reasonable, though rules were kept to
a minimum so as not to artificially distort the results of the model. 
One such rule for all subcategories was that the average military
value of any solution must be at least as high as the average for the
existing activities in each subcategory.  An example of a rule
applied to the naval shipyard subcategory was that nuclear workload
must be accomplished at nuclear-capable shipyards.  This reflects the
realities of the workload distribution to naval shipyards.  For naval
bases, one rule was that the current force level distribution between
the Atlantic and Pacific fleets would be maintained.  This prevented
the model from placing ships on either coast in a manner that was
inconsistent with operational or strategic realities. 

The configuration model was programmed to derive the three best
alternatives for each subcategory.  Each alternative successively
reduced less excess capacity.  For most subcategories, sensitivity
analyses were also performed, whereby future requirements were
increased by 10 percent and then decreased by 10 and 20 percent. 
This enabled BSEC to evaluate the effect of such changes on possible
configuration alternatives. 

BSEC generally chose several alternatives from the results of
configuration analysis as scenarios to conduct cost and savings
analyses.  Cost and savings data for each scenario was then obtained
from the affected activities and certified by the providers
throughout the chain of command.  BSEC then used this data in the
COBRA model to evaluate relative cost and savings of scenarios. 

After arriving at a set of scenarios that it was prepared to
recommend to the Secretary of the Navy, BSEC conducted analyses on
the impact of the proposed actions on the affected economic areas,
the ability of the receiving sites' communities to absorb an increase
in Department of the Navy personnel, and the environmental
considerations of closing or realigning those bases.  Upon reviewing
the results of the impact analyses, BSEC, through its own
deliberations and consultations with senior military and civilian
executive officials, arrived at the recommendations provided to the
Secretary of the Navy. 


   THE NAVY'S 1995 BRAC
   RECOMMENDATIONS WERE GENERALLY
   SOUND
---------------------------------------------------------- Chapter 6:3

The Navy is recommending 62 closure or realignment actions.  Several
actions affect large activities, such as a shipyard and a training
air station.  The Navy's recommendations logically flowed from its
analytical process; however, one technical center facility located at
an activity recommended for closure, the Naval Surface Warfare Center
(NSWC) White Oak, Maryland, may be required by DOD in the future. 
The majority of closure and realignment actions are in the technical
centers subcategory.  In addition, 11 reserve activities are being
recommended for closure.  Four of the 12 subcategories (operational
air stations, naval shipyards, training air stations, and technical
centers/laboratories) accounted for 34 of the 62 Navy
recommendations.  The recommendations in these subcategories include
about 60 percent of the total one-time costs and over 80 percent of
the total job losses associated with the Navy's recommendations. 
Table 6.2 summarizes the number of the Navy's closure and realignment
recommendations by subcategory. 



                          Table 6.2
           
           The Navy's 1995 BRAC Recommendations, by
                         Subcategory

                                 Closure and    Redirects of
                                 realignment   previous BRAC
                              recommendation  recommendation
Subcategory                                s               s
----------------------------  --------------  --------------
Naval bases                                1               0
Operational air stations                   2               6
Reserve air stations                       1               1
Reserve activities                        11               0
Training air stations                      2               0
Training/education                         1               3
Naval aviation depots                      0               1
Naval shipyards                            2               1
Fleet and industrial supply                2               0
 centers
Technical centers/                        20               1
 laboratories
Administration activities                  1               5
Supervisors of shipbuilding                1               0
============================================================
Total                                     44              18
------------------------------------------------------------

      OPERATIONAL AIR STATIONS
-------------------------------------------------------- Chapter 6:3.1

In the operational air station subcategory, the configuration
analysis indicated that excess capacity equivalent to several
activities could be eliminated.  As a result, several closure
scenarios for cost and savings analyses were developed.  The
recommended closure of NAF Adak, Alaska, resulted from these
analyses.  However, substantial excess capacity remained in the
subcategory.  BSEC then reassessed 1993 BRAC decisions so it could
better use existing air station capacity, rather than attempt to
close additional air stations.  BSEC determined that such a solution
was feasible and would save construction money budgeted for the move
of aircraft based on BRAC 1993 decisions. 

The changes to the 1993 BRAC decisions included moving F/A-18
squadrons from NAS Cecil Field, Florida, to NAS Oceana, Virginia,
rather than NAS Cherry Point, North Carolina, and moving all F-14s to
NAS Oceana rather than locating some at NAS Lemoore, California.  In
assessing the costs and savings of these changes, the Navy used the
COBRA model, but only in considering costs and savings items that
would be different from the 1993 cost and savings analysis.  For
example, some military construction would be required at Oceana and
Jacksonville, Florida, as a result of the changes made in 1995, and
these costs were included.  Budgeted military construction projects
that would no longer be required were counted as a savings.  We
verified the amount of the savings.  We also reviewed additional
costs and savings items in the 1995 COBRA analysis and believe that
they are generally reasonable and represent what would, in fact, be
different from the items in the 1993 analysis.  For the air stations
subcategory as a whole, the Navy made recommendations to close or
reduce operations at several activities, such as NAF Adak and NAS Key
West, Florida. 


      TRAINING AIR STATIONS
-------------------------------------------------------- Chapter 6:3.2

The capacity analysis for the training air stations subcategory
indicated that future requirements for the various training paths,
such as primary pilot and advanced helicopter training, was from 19
to 42 percent below peak historic levels.  The Navy's best
configuration analysis indicated that with even a 10- or 20-percent
increase in requirements, NAS Meridian, Mississippi, should close. 
The Navy evaluated several scenarios involving the projected closure
of NAS Meridian; NAS Corpus Christi, Texas; and NAS Whiting Field,
Florida, which was recommended by the undergraduate pilot training
(UPT) cross-service group.  The scenario that included the closure of
Whiting was rejected due to high costs and protracted ROI period. 
BSEC determined that the best solution was the closure of Meridian
and the realignment of Corpus Christi as a NAF, which was what the
Navy recommended. 

The Secretary of the Navy queried BSEC about the possibility of NAS
Meridian and Columbus AFB, Mississippi, being used as a joint
fixed-wing training activity due to their proximity, airspace,
outlying fields, and bombing range.  Thus, in making its
recommendation to close NAS Meridian and acknowledging that the air
station is not needed for Navy UPT, the Navy suggested the potential
for Meridian NAS and Columbus AFB being linked as a joint UPT base. 


      NAVAL SHIPYARDS
-------------------------------------------------------- Chapter 6:3.3

As was the case for the naval shipyard subcategory in 1993, the Navy
was primarily concerned with satisfying future nuclear workload
requirements.  Nonnuclear work could be performed at any shipyard,
whereas nuclear work could be performed only at nuclear-capable
shipyards.  The configuration analysis produced several scenarios,
all of which indicated that at least one naval shipyard, Long Beach,
California, should be closed.  Other scenarios also pointed to the
closure of Ship Repair Facility (SRF) Guam or Portsmouth, New
Hampshire, or both.  BSEC determined that Portsmouth should not be
closed because of uncertainties in the future of the SSN-21 program
and the nature of the evolving submarine threat.  If the SSN-21
program is terminated or if there is a need for an increase in total
submarine force structure levels that could not be met through new
construction, the Navy would likely decide to lengthen the service
life of existing SSN-688 submarines.  This would involve refueling
those submarines whose reactor cores are nearing the end of their
design lives rather than retiring them.  Thus, workload requirements
for refueling SSN-688s would increase.  The Portsmouth shipyard is
the sole site for most SSN-688 work.  The Chief of Naval Operations
consulted with BSEC and concurred with these conclusions. 

In 1993, the Navy did not recommend Long Beach for closure, despite
demonstrated excess capacity, because of concerns about losing the
capability to drydock aircraft carriers on the West Coast.  The
Navy's 1995 analysis indicated that Long Beach was not needed to
satisfy the Navy's future requirements.  In deliberating the possible
closure of Long Beach, BSEC and senior naval officers and civilian
officials did not believe it was necessary to retain the large
drydock capability at Long Beach to support the fleet.  Therefore,
along with the SRF Guam, NSY Long Beach was recommended for closure. 
The Navy also recommended the closure of the two large surge drydocks
at Philadelphia--a change from the 1991 BRAC decision--for the same
reason. 

Questions have been raised about the risk involved in the loss of
organic shipyard depot capability on the West Coast if Long Beach is
closed.  These questions center around the viability of private
shipyards in performing work now done at Long Beach as well as the
loss of the large drydock.  The Navy does not share this concern and
points out that much of the work scheduled for Long Beach will be
moved to the private sector and thus help these private yards. 

BSEC sought to reduce the substantial excess capacity remaining in
the shipyard subcategory by transferring depot-related work from two
technical centers.  Those two centers were then recommended for
closure or realignment because the remaining technical work could be
transferred to other technical centers. 


      TECHNICAL CENTERS
-------------------------------------------------------- Chapter 6:3.4

During the 1995 process, the Navy was concerned that excess capacity
in technical centers/laboratories subcategory had not been reduced in
BRAC 1993 to the same degree as in other subcategories.  The Navy
also wanted to further enhance the multispectrum nature of the
technical centers, which encompass research, development, test, and
evaluation (RDT&E).  The configuration analysis for this subcategory
involved complicated assessments of the existing capabilities and
requirements for 29 functional categories, such as undersea and
surface ships platforms, across four phases of work:  RDT&E,
acquisition, lifetime support, and general.  This analysis involved
satisfying future requirements by transferring specific functions
from various categories, such as undersea and surface ship platforms,
to only those activities that performed the same function.  However,
functional workload could be transferred to an activity that does
different life-cycle phase work; for example, undersea and surface
ship platform lifetime support work could be moved to an activity
with undersea and surface ship platform acquisition work. 

The Navy analyzed cost and savings projections for 43 scenarios in
the technical centers/laboratories subcategory and recommended 21
closure or realignment actions.  As indicated earlier, capacity
reductions were also realized through the transfer of depot work from
technical centers to industrial activities.  Depot work from NSWC
Louisville, Kentucky, and the Naval Undersea Warfare Center (NUWC)
Keyport, Washington, was transferred to existing shipyards.  Depot
work from the Naval Air Warfare Center (NAWC) Lakehurst, New Jersey,
and support work from the Naval Aviation Engineering Service Unit
(NAESU) Philadelphia, Pennsylvania, and Naval Air Technical Services
Facility (NATSF) Philadelphia, were transferred to existing naval
aviation depots (NADEPs). 

The Secretary of Defense's recommendations include the complete
closure of NSWC White Oak.  However, in testimony before the BRAC
Commission on March 1, 1995, the Chairman of the Joint Chiefs of
Staff indicated that the White Oak activity houses a hypervelocity
wind tunnel that serves military research and development needs and
is used by other agencies, such as the National Aeronautics and Space
Administration.  The Chairman stated that the wind tunnel probably
should be retained.  The Navy maintains that the wind tunnel is
excess to its needs and has no plans to retain the facility.  Should
a DOD component or other government agency determine that it needs
the wind tunnel, that agency would have to obtain the wind tunnel
facility from the Navy. 

The Navy removed several technical centers from consideration for
various reasons after COBRA analysis.  BSEC determined that AEGIS
Moorestown, New Jersey, and AEGIS Wallops, Virginia, performed work
that was both dissimilar and required in each case.  BSEC's concern
about the possible loss of the organic explosives capability at NSWC
Indian Head, Maryland, prompted it to remove that activity from
consideration.  As discussed later, the Naval Warfare Assessment
Division (NWAD) Corona, California, was removed from consideration in
response to the Secretary of the Navy's concern about eliminating
further civilian jobs in California. 


   IMPACT OF CROSS-SERVICE GROUP
   ALTERNATIVES ON NAVY DECISIONS
---------------------------------------------------------- Chapter 6:4

As part of its process, the Navy assessed alternatives offered by the
five functional cross-service groups.  The Navy developed separate
closure or realignment scenarios based on the cross-service group
alternatives or incorporated alternatives into existing Navy
scenarios.  The Navy then issued cost-related data calls to its
activities in those cases in which a joint scenario indicated that a
Navy function would be shifted to another service.  The Navy also
obtained data in these cases from the affected activities of other
services.  The Navy's final recommendations include 20 that reflect
portions of cross-service group alternatives.  In analyzing the
cross-service group alternatives, the Navy concluded the following: 

  Test and Evaluation.  The Navy's analyses included all alternatives
     provided by the test and evaluation and laboratories
     cross-service groups.  The detailed approach utilized by the
     cross-service groups in this area focused on specific functions,
     whereas the Navy focused its review on functions in broader
     categories.  In addition, the nature of Navy technical centers
     is multispectrum and includes both test and evaluation and
     laboratory (R&D) functions.  Thus, there was not a one-for-one
     correlation with Navy technical center scenarios.  Of the
     alternatives offered by the cross-service groups, many were
     already being considered under the Navy's process.  Much more
     Navy technical capacity was reduced by the Navy's
     recommendations than was suggested within the cross-service
     group reports. 

  Laboratories.  See Test and Evaluation. 

  Undergraduate Pilot Training.  The Navy's recommendations
     incorporated parts of two of the three joint alternatives
     forwarded by the UPT cross-service group.  BSEC rejected a third
     alternative that would have closed NAS Whiting Field because of
     high one-time costs and a long ROI period. 

  Medical Treatment Facilities.  Naval hospitals are true "followers"
     in that their presence is closely tied to the presence of other
     Navy and Marine Corps units in their area.  The cross-service
     group for medical treatment facilities and graduate medical
     education recommended no closures of naval hospitals and the
     realignment of only two (Corpus Christi and Beaufort, South
     Carolina) into clinics.  Both hospitals suggested by the
     cross-service group were in areas with a large active duty
     presence, so BSEC determined it was imprudent to lower the
     military medical presence.  Since no operational bases with
     tenant hospitals were recommended for closure, no hospitals were
     recommended for closure or realignment by the Navy. 

  Depot Maintenance.  BSEC analyzed four scenarios arising from this
     cross-service group, including one that examined application of
     a developing regional maintenance concept, which would align
     several depot and intermediate maintenance activities under a
     single regional management structure.  The Navy said that the
     results of its COBRA analysis demonstrated that none of the
     scenarios resulted in a consolidation or interservicing
     distribution of workload that was more cost-effective than the
     Navy's best scenario, which was adopted as its final
     recommendation. 

In response to the cross-service group's proposed closure of NADEP
Jacksonville, the results of the Navy's scenario that contemplated
creation of a Regional Maintenance Activity, Southeast, suggest that
some operational and economic efficiencies could be achieved. 
However, the Navy concluded that prudent military judgment dictated
that the application of the regional maintenance concept to NADEP
Jacksonville, with its restructuring of the principal industrial
activity in this area's fleet concentration, was premature.  It
concluded that such a concept could be executed outside the BRAC
framework in the future. 

Alternatives issued by the cross-service group also suggested closure
or realignment of segments of functional workload by commodities from
each of the five naval shipyards to other DOD depot maintenance
activities.  The Navy concluded that none of the scenarios resulted
in a consolidation or interservicing distribution of workload that
was more cost-effective than the Navy scenarios under evaluation. 
The cross-service group alternatives suggesting the movement of
industrial workload from NUWC Keyport; NSWC Crane, Indiana; and NSWC
Louisville to other naval activities were incorporated into existing
Navy scenarios, consistent with the Navy's intent to move industrial
work out of technical centers. 


   COST AS A FACTOR IN NAVY
   DECISIONS
---------------------------------------------------------- Chapter 6:5

The Navy used the COBRA algorithms as a tool to ensure that
recommendations for closure and realignment actions were
cost-effective.  The Navy did not use COBRA as a means of finding the
lowest cost alternative, but the analysis of several alternatives
permitted the Navy to find ways to reduce excess capacity for less
cost and satisfy operational requirements.  In considering various
cost and savings scenarios, the Navy was concerned with the up-front
costs associated with closures and realignments and the length of
time required to obtain a ROI.  The Navy's process for developing
cost data for closures has led to some controversy over the
reasonableness of cost estimates pertaining to several technical
center recommendations. 

The Navy's process was unique in that it obtained input on cost and
savings data from activities identified as potential closure or
realignment candidates.  This has contributed to concerns about the
accuracy of such data.  As described earlier, BSEC obtained cost and
savings data from affected activities by issuing scenario data calls
through the chain of command to closing activities.  The major
claimant for these activities, such as the fleet commander for an air
station, was responsible for coordinating data collection from all
other affected activities in that scenario. 

Although the cost and savings data was certified through the chain of
command, in several instances involving technical centers, the
reasonableness of cost and savings estimates was questioned by BSEC. 
This final review resulted in some substantial changes to original
estimates by BSEC, which ultimately certified the data.  We reviewed
the changes made to several scenarios, including NSWC Louisville,
NAWC Indianapolis, and NAWC Lakehurst.  Some costs were disallowed by
BSEC because they were already included in the COBRA algorithms. 
Some were disallowed because they were environmental cleanup-related
costs, which are not included in BRAC analyses.  Other disallowed
costs involved more difficult judgments and decisions, for example,
military construction requirements, productivity, and "disruption"
loss.  Although time constraints prevented us from completing a full
review of more than a few recommendations, we found no basis to
question the BSEC decisions we examined.  Nevertheless, we believe
the Commission should more thoroughly examine the basis for the cost
exclusions associated with scenarios in the technical centers
subcategory. 

The estimated up-front costs of the Navy's closure and realignment
recommendations are the lowest of any round of base closures for the
Navy.  The Navy has also estimated the longest period for ROI as
being only 4 years, and most actions experience an immediate ROI. 
Table 6.3 displays the costs and ROI for Navy activities recommended
for closure. 



                                    Table 6.3
                     
                      Estimated Costs and Savings Resulting
                      From Navy Recommendations for Closure

                      (Fiscal year 1996 dollars in millions)

                                               Recurring
                        One-time  6-year net      annual                 20-year
Activity                 costs\a   savings\b   savings\c   ROI years         NPV
--------------------  ----------  ----------  ----------  ----------  ----------
NAF Adak                    $9.4      $108.0       $26.0   Immediate      $354.8
NSY Long Beach              74.5       725.6       130.6   Immediate      1948.6
SRF Guam                     8.4       171.9        37.8   Immediate       529.0
NAWC Indianapolis           77.6         7.8        39.2           1       392.1
NSWC Louisville            103.9      (39.4)        28.6           3       243.7
NSWC White Oak               2.9        28.7         6.0   Immediate        85.9
NAS South Weymouth          17.3        50.8        27.4           1       315.2
NAS Meridian
NTTC Meridian               83.4       158.8        33.4   Immediate       471.2
NAS Alameda
NAS Corpus Christi
NAWC Lakehurst              96.9       (5.0)        37.2           3       358.7
NAWC Warminster
NCCOSC Warminster            8.4        33.1         7.6   Immediate       104.6
NISE San Diego               1.8        19.3         4.3   Immediate        60.0
NHRC San Diego               6.2       (2.0)         1.4           4        11.4
NPRDC San Diego              7.9       (4.3)         1.9           4        14.9
SUPSHIP Long Beach           0.3         0.8         0.3           1         3.3
NUWC New London             23.4        14.3         8.1           3        91.2
NRL Orlando                  8.4         3.7         2.8           3        30.1
FISC Guam                   18.4        14.3        31.1   Immediate       437.3
NBDL New Orleans             0.6        14.1         2.9   Immediate        41.8
NMRI Bethesda                3.7        19.0         9.5           1       111.0
NSWC Annapolis              25.0        36.7        14.5           1       175.1
NAESU Philadelphia           2.5         5.9         2.5           1        29.5
NATSF Philadelphia           5.7         1.5         2.2           3        22.7
NAWC Oreland                 0.1         0\d         0\e           3         0.2
FISC Charleston              2.3         2.3         0.9           2        10.8
NISE Norfolk                 4.6         0.1         2.1           3        20.4
NAVMASSO Chesapeake          2.2         9.0         2.7           1        34.9
NRC Huntsville               0.1         2.6         0.5   Immediate         7.2
NRC Stockton                   0         2.0         0.4   Immediate         5.4
NRC Santa Ana                  0         3.0         0.5   Immediate         8.1
NRC Pomona                     0         1.9         0.3   Immediate         5.1
NRC Cadillac                   0         1.8         0.3   Immediate         5.0
NRC Staten Island              0         4.5         0.6   Immediate         9.8
NRC Laredo                     0         1.4         0.3   Immediate         3.8
NRC Sheboygan                  0         1.5         0.3   Immediate         4.1
NRC Olathe                   0.2         3.9         0.7   Immediate        10.9
REDCOM New Orleans           0.6         6.0         1.9   Immediate        23.8
REDCOM Charleston            0.5        14.4         2.7   Immediate        39.9
================================================================================
Total                     $597.2    $1,418.0      $469.5                $6,021.5
--------------------------------------------------------------------------------
Note:  Totals may not compare to those in DOD's report due to
rounding. 

\a This represents unique one-time costs to implement the
recommendation. 

\b This represents net savings within the 6-year implementation
period. 

\c Projected recurring annual savings after the 6-year period. 

\d The 6-year net savings for NAWC Oreland is $33,000. 

\e The annual savings after implementation period for NAWC Oreland is
$15,000. 

As indicated in table 6.3, for some scenarios, the Navy analyzed
cost, savings, and ROI data for several activities together.  The
nature of these scenarios did not lend itself to a separate cost and
savings analysis.  For example, since units, equipment, and people
would be moving from NAS Meridian and NAS Alameda, California (a
redirect of a BRAC 1993 decision) to NAF Corpus Christi (a
realignment), and units, equipment, and people would be moving from
Corpus Christi to Pensacola, Florida, the entire group of moves was
considered together.  In addition, since the closure of NAS Meridian
depended on the closure of the Naval Technical Training Center (NTTC)
Meridian and the movement of its functions to several activities, the
latter was also part of the overall cost and savings analysis. 

Table 6.4 displays the cost and savings information for activities
the Navy has recommended for realignment.  (The realignment of NAS
Corpus Christi was included in table 6.3 as part of the NAS Meridian
scenario.)



                                    Table 6.4
                     
                      Estimated Costs and Savings from Navy
                         Recommendations for Realignment

                      (Fiscal year 1996 dollars in millions)

                                               Recurring
                        One-time  6-year net      annual                 20-year
Activity                 costs\a   savings\b   savings\c  ROI\ years         NPV
--------------------  ----------  ----------  ----------  ----------  ----------
NAS Key West                $0.4        $8.2        $1.8   Immediate       $25.5
Naval activities,           93.1        66.2        42.5           1       474.3
 Guam
NUWC Keyport                 2.1         9.8         2.1           1        29.7
NISMC Arlington              0.1         0.3         0.1           2         1.7
================================================================================
Total                      $95.7       $84.5       $46.5                  $531.2
--------------------------------------------------------------------------------
Note:  Totals may not compare to those in DOD's report due to
rounding. 

\a This represents unique one-time costs to implement the
recommendation. 

\b This represents net savings within the 6-year implementation
period. 

\c Projected recurring annual savings after the 6-year period. 

Table 6.5 displays cost and savings information for activities
associated with redirects of previous BRAC decisions by the Navy. 
(The redirect of the NAS Alameda decision is included in table 6.3 as
part of the NAS Meridian/NAF Corpus Christi scenario.)



                                    Table 6.5
                     
                      Estimated Costs and Savings from Navy-
                      Recommended Reconsiderations of Prior
                                  BRAC Decisions

                      (Fiscal year 1996 dollars in millions)

                                               Recurring
                        One-time  6-year net      annual                 20-year
Activity                 costs\a   savings\b   savings\c   ROI years         NPV
--------------------  ----------  ----------  ----------  ----------  ----------
MCAS El Toro               $90.2      $293.0        $6.9   Immediate      $346.8
MCAS Tustin
NRD San Diego                0.3         0.1         0.0           1         0.1
NTC San Diego                0.6        20.0         0.1   Immediate        20.7
NTC Orlando                  5.2         4.8         0.0   Immediate         5.0
NAS Cecil Field             66.6       335.1        11.5   Immediate       437.8
NADEP Pensacola              1.5         2.4         0.2   Immediate         3.8
NPS Orlando                148.0        19.5         5.3           1        71.1
NAS Agana                   43.7       213.8        21.7   Immediate       418.0
NAS Barbers Point              0        17.6         0.1   Immediate        18.4
NAF Detroit                    0         9.4           0   Immediate         9.3
NSY Norfolk--                  0        51.9         8.8   Immediate       134.7
 Philadelphia
NAVSEA Arlington           159.7        47.6         9.4   Immediate       144.0
ONR Arlington\d
SPAWAR Arlington            24.0       120.0        25.3   Immediate       360.0
Naval Recruit                6.5         1.1           0   Immediate         1.2
 Command,
 Washington, D.C.
Naval Security                 0         0\e           0   Immediate         0\e
 Group, Washington,
 D.C.
================================================================================
Total                     $546.3    $1,126.3       $89.4                $1,945.2
--------------------------------------------------------------------------------
Note:  Totals may not compare to those in DOD's report due to
rounding. 

\a This represents unique one-time costs to implement the
recommendation. 

\b This represents net savings within the 6-year implementation
period. 

\c Projected recurring annual savings after the 6-year period. 

\d The Navy reevaluated its BRAC 1993 decision, which would have
involved about $9.4 million in one-time costs and a 10-year time to
realize a payback.  Thus, no new COBRA was run. 

\e The 6-year net savings and the 20-year net present value are both
$4,000. 

In some scenarios, such as MCAS Tustin and MCAS El Toro, California,
the Navy analyzed the cost, savings, and ROI for several activities
together.  This was due to the interdependence of moves associated
with these scenarios. 


   COSTS, ECONOMIC IMPACT, AND
   OTHER FACTORS ELIMINATED SOME
   CANDIDATES FOR CLOSURE OR
   REALIGNMENT
---------------------------------------------------------- Chapter 6:6

The Navy eliminated activities from closure or realignment
consideration as part of its process.  If no excess capacity was
found in a subcategory, no further analysis was performed on that
subcategory.  Additionally, concerns of an operational nature, based
on military judgment, caused BSEC to eliminate some activities from
consideration.  Once BSEC developed closure and realignment
scenarios, the results of costs and savings and economic impact
analyses were used to eliminate individual activities from
consideration.  The Secretary of the Navy eliminated some activities
from consideration due to concerns about cumulative job losses. 
Table 6.6 shows the cost and savings information for activities in
the subcategories the Navy identified as having excess capacity but
did not recommend for closure or realignment.  The table also
includes information on the activities eliminated from consideration
by the Secretary of the Navy because of concern about the magnitude
of job losses in California. 



                                    Table 6.6
                     
                         Estimated Costs and Savings From
                     Selected Navy Scenarios Eliminated from
                                  Consideration

                      (Fiscal year 1996 dollars in millions)

                                               Recurring
                        One-time  6-year net      annual                 20-year
Activity                 costs\a   savings\b   savings\c  ROI\ years        NPV\
--------------------  ----------  ----------  ----------  ----------  ----------
ASO Philadelphia           $68.7     ($26.4)       $12.0           6       $91.4
NAVFAC Whidbey              27.5      (19.4)         4.6           7        27.0
 Island
SDIV Charleston             30.6         1.0         7.1           5        69.1
EFA NW Bangor                6.9       (8.1)         0.5          24       (2.4)
NAVHOSP Corpus               2.7         5.1         1.4   Immediate        18.5
 Christi
NAVHOSP Beaufort             1.0       (1.9)       (0.8)       Never       (9.5)
WDIV San Bruno\d             5.5         5.8         4.8           1        51.9
NWAD Corona\d               76.0      (31.7)        21.3           3       178.3
SUPSHIP San                  0.4         1.6         0.5           1         6.8
 Francisco\d
FISC Oakland\d              25.3        47.3        18.9   Immediate       228.6
--------------------------------------------------------------------------------
\a This represents unique one-time costs to implement the
recommendation. 

\b This represents net savings within the 6-year implementation
period. 

\c Projected recurring annual savings after the 6-year period. 

\d These activities were eliminated from consideration by the
Secretary of the Navy. 


      CAPACITY AND OPERATIONAL
      CONCERNS AND COST AND
      SAVINGS ANALYSIS
-------------------------------------------------------- Chapter 6:6.1

The Navy's capacity analyses revealed that seven subcategories did
not have sufficient excess capacity to warrant closure or realignment
consideration.  Those subcategories were Marine Corps bases,
construction battalion centers, naval security group activities,
naval computer and telecommunications stations, naval meteorology and
oceanography centers, dental activities, and Military Sealift Command
activities. 

In the Marine Corps bases subcategory, for example, some degree of
excess capacity was indicated among the five capacity measures: 
maintenance space, covered storage space, barracks, messing, and
administrative space.  However, BSEC determined that the distribution
of the relative excess capacity did not allow reductions in any
combination of these categories to the extent that one of the Marine
Corps bases could be closed.  The capacity analysis for Military
Sealift Command activities indicated that ongoing reorganization
within the Command matched the changing force structure;
subsequently, there was little excess capacity to eliminate.  In the
dental activities subcategory, BSEC determined there to be a
21-percent deficiency in dental workload, after a comparison of
existing capacity to future requirements.  Thus, this subcategory was
also eliminated from further consideration. 

The elimination of the 7 subcategories that did not have sufficient
excess capacity left 20 subcategories, which BSEC analyzed to develop
recommendations.  BSEC did not make recommendations in 8 of the 20
subcategories:  ordnance activities, Marine Corps logistics bases,
inventory control points (ICP), shore intermediate maintenance
activities, public works centers, Integrated Undersea Surveillance
System (IUSS) facilities, medical activities, and engineering field
divisions and activities. 

Recommendations were not made in these eight subcategories for
various reasons.  In the ordnance activities subcategory, BSEC was
concerned about uncertainties in future weapon storage and wartime
surge requirements.  BSEC also did not recommend closing either of
the two Marine Corps logistics bases because the distribution of
capacity at existing activities would not permit future requirements
to be met if one of the activities were closed. 

Of the Navy's two ICPs, the Aviation Supply Office (ASO),
Philadelphia, Pennsylvania, was identified as a suitable candidate
for closure.  However, the results of the cost and savings analysis
associated with this scenario were unsatisfactory to BSEC in that the
up-front costs were considered too large and the ROI time was
considered too long.  In addition, current efforts by the Naval
Supply Systems Command in streamlining management structures
precluded significant personnel savings from a potential 1995 action. 

BSEC identified excess capacity in its shore intermediate maintenance
activity (SIMA) subcategory.  BSEC determined SIMAs to be "follower"
activities, since they are closely tied to the presence of other Navy
units in their area or their host activity.  Since none of these
hosts were included in the Navy's final recommendations, no SIMAs
were recommended for closure or realignment.  BSEC determined that
public works centers (PWC) were also essentially follower activities. 
Thus, should the customers they support leave, they themselves would
become excess.  Since BSEC approved the closure or realignment of
several activities on Guam (the ship repair facility, fleet and
industrial support center, and piers), many public works center
customers would be leaving the area.  Concerned about civilian job
losses on Guam that would result from the PWC's closure, BSEC
determined that a sufficient number of customers would remain to
justify leaving the center open. 

BSEC determined through its capacity analysis that it was feasible
for only one of the two IUSS facilities (Whidbey Island, Washington,
and Dam Neck, Virginia) to perform all necessary functions in the
subcategory.  Since the naval facility (NAVFAC) at Whidbey Island had
a lower military value than the facility at Dam Neck, BSEC assessed a
scenario identifying NAVFAC Whidbey Island for closure.  However,
BSEC subsequently determined that the projected costs and savings
associated with such a recommendation did not justify the loss of
operational flexibility to fleet commanders of having a facility on
each coast. 

Even though excess capacity was also found in the medical activities
subcategory, BSEC determined these to be follower activities.  The
cross-service group provided the Navy with an alternative to realign
two naval hospitals (Beaufort and Corpus Christi) into clinics. 
However, since no activity with a tenant hospital in any subcategory
was recommended for closure by the Navy, no hospitals were included
in final recommendations. 

Excess capacity was identified in the engineering field divisions and
activities subcategory, although BSEC recognized that these
activities were closely tied to Navy presence in a region.  Southern
Division, Charleston, South Carolina, and Engineering Field Activity
Northwest (EFA NW), Bangor, Washington, were eliminated from
consideration for closure because the scenarios did not offer a
favorable payback. 

In several instances, the Navy eliminated closure and realignment
options due to the results of COBRA analysis.  For example, the
closure of NSWC Crane was dropped due to high one-time costs and no
return on investment resulting from two alternatives and high
one-time costs relative to the 20-year NPV for a third alternative. 
The decision not to recommend ASO Philadelphia for closure was also
partially due to the high one-time costs and long payback period. 
The decision not to close the IUSS activity at NAVFAC Whidbey Island
was due to BSEC's decision that the high one-time costs and limited
savings did not justify the loss of operational flexibility.  The
realignment of the naval hospital at Beaufort to a medical clinic was
not pursued because the COBRA analysis indicated that the resulting
increase in CHAMPUS costs would result in the scenario never
achieving a ROI. 


      ECONOMIC IMPACT CONCERNS
-------------------------------------------------------- Chapter 6:6.2

Five activities were eliminated from consideration due to concern
about cumulative job losses.  The Secretary of the Navy removed four
activities in California from consideration because of concerns about
total cumulative direct job losses in the state.  BSEC removed PWC
Guam because of concerns about civilian job losses that would result
from that closure.  The Engineering Field Activity West (WDIV), San
Bruno; NWAD Corona; Supervisors of Shipbuilding, Conversion and
Repair (SUPSHIP) San Francisco; and the Fleet and Industrial Supply
Center (FISC) Oakland were eliminated from consideration for closure
by the Secretary of the Navy based on his concerns about cumulative
civilian job losses in California. 

The Navy's decisions on these five activities raise several
questions.  Navy officials stated that the Secretary of the Navy made
his decisions based on cumulative civilian job losses statewide
rather than on economic impact as a percentage of an economic area's
employment population.  OSD guidance stipulates that economic impact
is to be assessed at the economic area level (metropolitan
statistical area or county) and that priority consideration should be
given to the military value criteria.  However, as in previous BRAC
rounds, OSD has no other guidance on how the services are to consider
economic impact in their deliberative process. 

The cumulative job losses in California are greater than the
comparable job loss in any other state.  However, the individual
economic impact of each of the four California activities, as defined
by OSD criteria, is less than the impacts estimated for other
activities in other states recommended for closure.  For example, the
closure of NWAD Corona would have meant a total loss of 3,055 jobs,
but the closure of NAS Meridian will result in an estimated loss of
3,324 jobs.  Yet NAS Meridian remained in the Navy's final
recommendations for closure.  The total losses in California before
the removal of the four activities was estimated to be 19,994 jobs,
roughly a 0.1-percent decrease in statewide employment, whereas the
estimated total losses for Mississippi are estimated to be 3,249
jobs, roughly a 0.3-percent decrease in statewide employment. 
Because the BRAC law (P.L.  101-510, as amended) states that all
bases must be considered equally, the Commission may wish to more
closely examine the Navy's decisions regarding the consideration of
job losses in California. 


   RECOMMENDATIONS
---------------------------------------------------------- Chapter 6:7

We recommend that the Defense Base Closure and Realignment Commission

  explore the need for a DOD component or some other government
     agency to obtain the wind tunnel facility at NSWC White Oak from
     the Navy in order to operate it in support of its mission;

  thoroughly examine the basis for exclusions to the cost and savings
     data associated with closure and realignment scenarios such as
     NSWC Louisville, NAWC Indianapolis, and NAWC Lakehurst in the
     technical centers subcategory; and

  examine, from an equity standpoint, the Navy's exclusion of
     activities from closure and realignment consideration due to
     concerns over job losses. 


DLA BASED ITS BRAC RECOMMENDATIONS
ON SOUND MILITARY AND BUSINESS
ANALYSES
============================================================ Chapter 7

The decision-making process that DLA employed to arrive at its BRAC
recommendations was well documented and flowed logically from the
data presented.  DLA recommended nine activities for closure,
disestablishment, or realignment, including a proposed change to a
1993 BRAC decision.  DLA was not directly affected by the
cross-service groups' recommendations. 

DLA made significant improvements for its 1995 BRAC process.  The
installation analysis and the commercially accepted Strategic
Analysis of Integrated Logistics Systems (SAILS) model provided
additional insight in the decision-making process.  Although DLA
eliminated a sizable amount of excess capacity with the closure and
disestablishment of four depots, it could reduce additional
infrastructure in the future.  However, such reductions are largely
dependent on DLA and the services further reducing their inventories. 


   DLA'S 1995 PROCESS WAS MUCH
   IMPROVED OVER ITS 1993 PROCESS
---------------------------------------------------------- Chapter 7:1

DLA first participated in the BRAC process in 1993.  BRAC 1993 was
problematic because questions arose about how decisions were made and
how accurate the cost and savings estimates were.  We found that
DLA's BRAC 1995 process for evaluating and recommending activities
for closure and realignment was well documented and that the data
used was generally accurate.  DLA consistently followed the
requirements of the applicable BRAC law, force structure plan, DLA's
concepts of operations,\1 DOD selection criteria, and OSD policy
guidance to ensure that all activities reviewed were evaluated fairly
and equitably. 

We found that DLA took significant actions to strengthen its process
for BRAC 1995.  Improvements were made in nearly every phase of DLA's
BRAC review process to ensure its integrity for BRAC 1995.  DLA

  refined its BRAC decision rules for scenario evaluation,

  used an off-line spreadsheet approach to calculate more reliable
     cost and savings estimates associated with nonlabor base
     operating support (BOS) and communications costs,

  used independent assessments of its facilities' conditions,

  standardized procedures for calculating and reporting storage space
     capacity and utilization,

  incorporated a detailed analysis for evaluating its host activity
     installations,\2

  adopted a commercially accepted optimization model to determine the
     relative operating costs of the DLA distribution depots, and

  involved the DOD IG in the data verification and validation phases
     of the BRAC process. 

As in BRAC 1993, DLA established decision rules to assist in
evaluating closure or realignment scenarios.  In BRAC 1995, DLA
refined these rules and placed more emphasis on adhering to them. 
Under the new rules, DLA was to make decisions that

  minimized infrastructure costs,

  made closing installations a top priority,

  eliminated duplicate activities and functions,

  maximized the use of shared overhead,

  optimized the use of remaining DLA space, and

  moved DLA activities from leased space to DOD-owned installations. 

The decision rules determined whether a scenario was abandoned,
refined, or retained for further analysis. 

One of the most significant of all improvements made to DLA's 1995
BRAC process was DLA's approach to estimating costs and savings
associated with BOS and communications.  In BRAC 1993, we reported
that DLA's savings were overstated because DLA did not adequately
consider differences between base operating costs, such as nonlabor
BOS and communications, when dissimilar operations were combined.\3
For BRAC 1995, DLA calculated the impact of the nonlabor BOS and
communication costs and savings outside of the COBRA model; these
costs were then entered into the COBRA model.  DLA's method of
carrying the losing site's BOS and communications costs and savings
to the receiving site was more realistic and reflective of DLA's
operations. 

In 1993, DLA did not have a consistent basis for gathering data on
the condition of its buildings and facilities.  Between BRAC 1993 and
1995, DLA commissioned the Navy PWC to perform long-range maintenance
planning for its facilities.  This data was provided to activity
commanders for verification and certification under BRAC 1995.  Also,
during this time the DLA Operations Support Office (DOSO) developed
similar data on the condition of DLA's administrative space.  This
data also was given to DLA activities to check and certify for use in
the BRAC process.  We found that by using PWC and DOSO data,
consistency was gained in analyzing DLA facilities. 

As in BRAC 1993, DLA required its distribution depots to use data
from their Storage Space Utilization Report (805 Report) to calculate
storage capacity and utilization rates for BRAC 1995.  However, in an
audit completed before BRAC 1995 data calls went out, the DOD IG
found that these reports inconsistently reported and documented
storage space capacity and utilization.  On the basis of this audit,
DLA provided guidance that standardized procedures for calculating
and reporting storage space capacity.\4

In BRAC 1993, DLA only assessed the military value of its activities
and did not consider or analyze the military value of its
installations where it was the host and other DOD and non-DOD
activities were tenants.  For BRAC 1995, DLA not only evaluated its
activities on these installations but also analyzed the military
value of these installations.\5 We believe the installation analysis
provided a broader basis for considering the closure of an
installation as a whole. 

For BRAC 1995, DLA used SAILS, a commercially available optimization
model, to help make closure and realignment decisions regarding its
stand-alone distribution depots.\6 The model helped DLA identify
which depots could be closed while minimizing transportation and
infrastructure costs.  Information such as the type of commodities,
workload capacity, transportation rates, and supplier and customer
geographic locations for all of DLA's distribution depots was loaded
into SAILS.  The model considered various configurations of closing
one or two stand-alone depots based on this information. 

DLA did not rely solely on the SAILS model results to decide which
depots to close; these results were considered along with the
military value and COBRA analyses.  We believe that the SAILS model
was a valuable tool in assessing the operating costs of its
stand-alone depots, because it helped DLA identify the most
cost-effective solution. 

In BRAC 1993, DLA's data was validated by DLA's Office of Internal
Review and augmented by field auditors.  Audit coverage was
strengthened in BRAC 1995 with the addition of the DOD IG to oversee
the audit effort.  In order to maintain independence and objectivity
in the 1995 BRAC process, we recommended, and DLA agreed, that DLA
field auditors should review the data collection process of
activities that were not in the same category as their own activity. 
This differed from the approach taken in BRAC 1993. 

The DOD IG was responsible for verifying the accuracy and
completeness of the certified field data, determining the adequacy of
the supporting documentation, and evaluating DLA's analyses.  DOD IG
audit teams visited sites to verify that field activity data was
collected in accordance with DLA's data collection plan and
recommended corrective action where necessary.  We accompanied the
DOD IG on some visits and facilitated its reviews by ensuring that
they were validating the most current data requested by DLA.  We also
independently validated some data and found the data was generally
well documented and supported.  For locations we did not visit, we
selectively reviewed the DOD IG's workpapers. 

Data used in the 1995 process was reviewed and favorably reported on
by the DOD IG audit teams.  The majority of errors found were due to
lack of supporting documentation; all errors that were essential to
DLA's analyses were subsequently corrected by the activities. 


--------------------
\1 DLA developed concepts of operations for its business areas. 
These concepts summarize the current position and future direction of
DLA missions and activities in relation to the changes noted in the
DOD force structure plan. 

\2 At six installations, DLA is the primary tenant and hosts other
DOD and non-DOD federal tenant activities. 

\3 Military Bases:  Analysis of DOD's Recommendations and Selection
Process for Closures and Realignments (GAO/NSIAD-93-173, Apr.  15,
1993). 

\4 According to a DOD IG official, in its validation of data call
questionnaire responses, no discrepancies in the storage space data
were reported by the activities. 

\5 DLA's six host installations are located in Columbus, Ohio; New
Cumberland, Pennsylvania; Richmond, Virginia; Tracy/Sharpe,
California; Ogden, Utah; and Memphis, Tennessee. 

\6 Stand-alone depots distribute a wide range of material to
customers in many locations.  These depots are not located with a
military service maintenance function. 


   IDENTIFYING CLOSURE AND
   REALIGNMENT CANDIDATES
---------------------------------------------------------- Chapter 7:2

DLA selected candidates to close, realign, or disestablish by first
grouping its 39 activities into four categories and five
subcategories (as shown in table 7.1).  DLA then analyzed the
capacity and military value of all activities within their respective
categories. 



                          Table 7.1
           
             Categories and Subcategories of DLA
                          Activities

                                                   Number of
Category            Subcategory                   activities
------------------  ----------------------------  ----------
Command and         Defense contract management            4
 control             districts
                    Defense distribution regions           2
                    Defense reutilization and              2
                     marketing operations
Inventory control                                          5
 points
Distribution        Stand-alone depots                     6
 depots
                    Collocated depots                     17
Service/support                                            3
============================================================
Total                                                     39
------------------------------------------------------------

      CAPACITY ANALYSIS
-------------------------------------------------------- Chapter 7:2.1

An excess capacity analysis was done for activities in each BRAC
category and subcategory.  The intent of this analysis was to
determine the usage of physical space and compare it with anticipated
future requirements.  Future requirements were based on (1) force
structure projections, (2) military service basing and operational
changes, and (3) DLA's initiatives for improving operational
efficiencies and effectiveness.  Activities that had significant
amounts of excess capacity were considered as potential receiver
sites in realignment recommendations. 

In all categories except the distribution depots, excess capacity was
based on the (1) total current existing administrative space, less
any special use space, and (2) number of additional personnel that
could be accommodated in that space.  The excess capacity analysis
for DLA's distribution depots was evaluated differently because of
their distribution mission.  For these depots, excess capacity was
measured in terms of (1) workload capacity--the depot's ability to
handle the in and out processing of material--and (2) physical
storage space capacity--the depot's ability to store material in
support of active issue, slow-moving, and war reserve material. 


      MILITARY VALUE ANALYSIS
-------------------------------------------------------- Chapter 7:2.2

DLA analyzed military value to determine the relative ranking of each
activity with respect to other activities in the same category or
subcategory.  Military value rankings did not, by themselves, provide
the basis for closure and realignment decisions.  Military value was
used in conjunction with DLA's concepts of operations, decision
rules, other analyses (e.g., installation analysis and SAILS model
results), and military judgment to make realignment and closure
recommendations. 


   DLA'S 1995 BRAC RECOMMENDATIONS
   WERE BASED ON MULTIPLE ANALYSES
---------------------------------------------------------- Chapter 7:3

DLA recommended nine activities for closure, realignment, or
disestablishment.  In one of these recommendations, DLA sought to
change or redirect a 1993 BRAC decision.  These recommendations were
the culmination of extensive deliberations by DLA's Executive
Group.\7 We observed these sessions firsthand and witnessed extensive
deliberations about each activity and the factors and analytical
tools that were used in the decision-making process. 

For the nine targeted activities, DLA examined whether these
decisions would have adverse economic, community infrastructure, and
environmental impacts.  It found that the impacts would be
negligible.  Table 7.2 shows DLA's 1995 BRAC recommendations by
category. 



                                    Table 7.2
                     
                       DLA's 1995 BRAC Recommendations, by
                                     Category

                                                     Number of  Names of
                                                    activities  activities
                                               recommended for  recommended for
                                                      closure,  closure,
                     Number of  Activities     realignment, or  realignment, or
DLA category        activities  studied       disestablishment  disestablishment
------------------  ----------  ------------  ----------------  ----------------
Command and                  8  All                          3  Defense Contract
control                                                         Management
                                                                District South

                                                                Defense Contract
                                                                Management
                                                                District West\a

                                                                Management
                                                                Command
                                                                International

Inventory control            5  All                          1  Defense
points\b                                                        Industrial
                                                                Supply Center\c

Distribution                23  All                          5  Defense Depot
depots\b                                                        Columbus
                                                                Defense Depot
                                                                Ogden
                                                                Defense Depot
                                                                Memphis
                                                                Defense Depot
                                                                Letterkenny
                                                                Defense Depot
                                                                Red River

Service/support              3  All                       None
activities
--------------------------------------------------------------------------------
\a This is a redirect of a 1993 BRAC decision. 

\b The installation analysis aided in the decision-making process for
selecting recommendations in these categories. 

\c This decision requires the disestablishment of the Defense
Industrial Supply Center and the realignment of the workload of the
Defense Construction Supply Center, the Defense General Supply
Center, and the Defense Personnel Support Center. 


--------------------
\7 DLA's Executive Group consisted of senior-level civilian and
military executives from DLA's business and staff areas.  The
Executive Group was chaired by the Principal Deputy Director of DLA. 


      COMMAND AND CONTROL
-------------------------------------------------------- Chapter 7:3.1

For each subcategory of activities in the command and control
category, DLA sought to determine (1) the need for those oversight
capabilities; (2) the optimum location for performing the activities'
missions; and (3) in the case of the Defense Contract Management
Districts (DCMD), the ability of a one-, two-, or three-regional
structure to provide the most manageable level of risk. 

DLA's closure and realignment recommendations in this category
primarily affected DCMDs.  Facilities in the other subcategories were
left intact due to their assessed high military value and importance
to providing management oversight. 

DCMD South, located in Marietta, Georgia, was recommended for
disestablishment for three reasons:  (1) it had the lowest military
value, (2) it had a lower concentration of workload and
administration offices to oversee than the Northeast District, and
(3) COBRA results indicated that closing it was the most
cost-effective decision of the two-district scenario options.  DLA
decided that although the scenario that reconfigured the three
districts into one large district had the greatest ROI, the span of
control overseeing 90 subordinate offices throughout the United
States was not feasible. 

The recommendation regarding DCMD West, located in El Segundo,
California, was a redirect of a 1993 BRAC decision.  The BRAC 1993
decision called for the movement of this district from leased space
to DOD-owned property in Long Beach, California.  The 1995 BRAC
decision expanded this earlier decision by incorporating the purchase
of a building by the Navy on behalf of DLA in the Long Beach area. 
DLA recommended this redirect action because (1) the Navy had not
successfully negotiated a land exchange with the Port Authority/City
of Long Beach and (2) the Long Beach Naval Shipyard, which was
another option for DLA, was placed on the Navy's BRAC 1995 list for
closure. 

Defense Contract Management Command (DCMC) International, located in
Dayton, Ohio, was not compared with the other contract management
districts because its workload was not comparable to the DCMDs.  On
the basis of the results of DLA's analysis and military judgment, DLA
recommended the merger of DCMC International with its headquarters
organization in the Washington, D.C., metropolitan area.  Because
DCMC International could be located anywhere, DLA had the opportunity
to take advantage of the location's proximity to the State Department
and to the international support infrastructure in Washington, D.C.,
and the surrounding area. 


      INVENTORY CONTROL POINTS
-------------------------------------------------------- Chapter 7:3.2

DLA operates five ICPs:  (1) the Defense Personnel Support Center
(DPSC), Philadelphia, Pennsylvania; (2) the Defense Industrial Supply
Center (DISC), Philadelphia, Pennsylvania; (3) the Defense General
Supply Center (DGSC), Richmond, Virginia; (4) the Defense Fuel Supply
Center (DFSC), Fort Belvoir, Virginia; and (5) the Defense
Construction Supply Center (DCSC), Columbus, Ohio. 

Each ICP is responsible for acquiring and managing an inventory of
supply items.  DFSC manages fuel-related items, while the other four
manage differing mixes of weapon system, troop support, and general
support items.  The number of troop and general support items managed
by the ICPs is relatively small, although they have high demand
patterns.  DLA manages nearly five times as many weapon system items
as troop and general support items combined. 

All activities were evaluated in terms of their military value. 
However, because DFSC and DPSC are one-of-a-kind activities, DLA
evaluated them separately.  On the basis of the results of the
military value analyses on both of these activities, DLA decided that
they should not be disestablished because of their unique missions. 
Therefore, in the case of DPSC, DLA evaluated DPSC as a receiver of
similar workloads managed by the other ICPs. 

DGSC, DISC, and DCSC were hardware centers and were evaluated as a
group in terms of military value.  Of the three, DISC received the
lowest military value score.  However, DLA did not consider the
results of the ICP military value analysis sufficient by itself to
reveal any obvious closure candidates.  On the basis of DLA's ICP
supply management concept of operations, DLA considered four
scenarios that analyzed the types of items each ICP managed and the
way they are managed.  DLA determined that maintaining one troop and
general support ICP was feasible, considering the small number and
the commercial nature of the items.  Holding the single troop and
general support ICP constant, DLA varied the scenarios between having
one and two weapon system ICPs. 

Although one weapon system ICP and one troop and general support ICP
had the greatest ROI, DLA considered the risk of having a single
weapon system ICP as too great because (1) the large number of weapon
system items posed a management challenge and (2) the ICP could
adversely affect the national defense if it failed to properly manage
critical weapon system items.  Therefore, DLA decided that two weapon
system ICPs posed an acceptable level of risk to the agency.  From
our perspective in observing DLA's process, we found that this became
a consensus decision within the Executive Group following
considerable internal discussions weighing the various options. 

DLA's recommendation to disestablish DISC and realign DCSC and DGSC
was influenced primarily by the ICP supply management concept of
operations, which stated that synergy could be gained by combining
commodities with similar management requirements.  Other
considerations affecting the decision to retain DCSC and DGSC
included (1) DLA's decision rule that emphasized maximizing the use
of shared overhead (i.e., taking advantage of the depots collocated
with these two ICPs), (2) the installation analysis indicating that
it was more beneficial to keep DCSC and DGSC because of their
relatively high military value rankings, and (3) the considerable
expansion capabilities of DCSC and DGSC. 

DLA recommended consolidating the troop and general support items at
DPSC because (1) DPSC is almost exclusively a troop support ICP, and
no other ICP manages these items; (2) the percentage of general
support items at the other ICPs is minimal; and (3) the consolidation
would reduce the potential management responsibilities between the
ICPs.  Weapon system items were realigned between DGSC and DCSC. 

By disestablishing DISC and delaying the implementation (until 1999)
of a 1993 BRAC recommendation to relocate DPSC to the Navy's Aviation
Supply Office compound in Philadelphia, DLA avoided a substantial
cost.  It did so by backfilling the space already occupied by DISC
and substantially reducing the amount of conversion of existing
warehouse space. 


      DISTRIBUTION DEPOTS
-------------------------------------------------------- Chapter 7:3.3

DLA operates 17 collocated and 6 stand-alone distribution depots. 
Collocated depots are located with a service maintenance depot or
major fleet support point, which is usually the distribution depot's
principal customer.  Stand-alone depots are not located with a
maintenance function but distribute a wide range of material to
customers in many locations. 

Of the five BRAC recommendations in this category, three involved
stand-alone depots (Columbus, Ogden, and Memphis) and two are
collocated with military service facilities (Letterkenny,
Pennsylvania, and Red River, Texas).  Decisions regarding the
distribution depots were based on various types of analyses; a single
analysis, in itself, did not drive DLA's realignment, closure, or
disestablishment recommendations.  Separate military value analyses
were performed for the collocated and stand-alone depots. 


         COLLOCATED DEPOTS
------------------------------------------------------ Chapter 7:3.3.1

Military value for the collocated depots was influenced by their
capacities and the strategic advantage of being located with a
military service maintenance customer.  DLA evaluated 17 collocated
depots.  However, the ultimate decision to realign or close any of
these activities was influenced by whether the depots' primary
military service customer was closed or realigned.  DLA considered
various closure and realignment scenarios for its collocated depots,
based on discussions with each military service's BRAC office
regarding the maintenance depots each was considering for BRAC
action.  As a result of service decisions, DLA recommended its depots
at Letterkenny and Red River for disestablishment. 


         STAND-ALONE DEPOTS
------------------------------------------------------ Chapter 7:3.3.2

To assess the military value of the stand-alone depots, DLA measured
the full range of support they provide to customers worldwide.  DLA's
recommendations were influenced by current and future capacity
requirements, military value analysis, installation analysis, and the
SAILS model.  On the basis of the results of these analyses, DLA
recommended that two stand-alone depots be closed and one realigned. 

Although Defense Depot Columbus, Ohio (DDCO), ranked last in military
value in the stand-alone category, the separate installation analysis
ranked Columbus highest.  This was a determining factor in DLA's
decision to recommend Columbus for realignment and not closure. 
Other considerations included (1) the decision to keep the ICP open
that was collocated with the Columbus depot and (2) DLA's concept of
operations that cited the need for storage space for slow-moving and
war reserve material. 

Considered but not recommended for closure or realignment was Defense
Depot Richmond, Virginia (DDRV).  Its relatively low military value
in the depot analysis suggested that it was a prime candidate for
closure or realignment.  However, the key factors that prevented its
closure or realignment included (1) the Richmond installation's
third-place ranking in the installation analysis, (2) the Navy PWC's
assessment that the depot's facilities were the best maintained in
DLA, (3) the SAILS model's favoring this depot's location on the East
Coast, and (4) DLA's decision to keep the collocated Richmond ICP
open. 

Defense Depot Memphis, Tennessee (DDMT), and Defense Depot Ogden,
Utah (DDOU), tied for third place in the stand-alone depot military
value analysis.  Both depots had the lowest rankings in the
installation analysis, and the SAILS model showed that closing these
two depots resulted in the lowest operating costs for the remaining
depot structure.  According to DLA, the capacities of the other
depots remaining in the system could make up for the loss of the
production and physical space of these two depots.  By closing these
two depots, DLA can eliminate excess and close entire installations. 
Closing DDCO and DDRV would not have produced installation closures. 

Historically, we have reported that government storage capacity far
exceeds storage requirements.\8 DLA officials agree with us on this
issue.  DLA's recommendations to close DDOU and DDMT, in addition to
disestablishing two collocated depots, are based on anticipated
declining inventory requirements.\9 Such reductions, if they fail to
occur, could cause DLA to fall short in storage capacity.  To guard
against such an occurrence, DLA negotiated with the Air Force and the
Navy for use of space on their bases (where DLA already has a
presence) should it be needed.  Conversely, if DLA and the services
further reduce their inventories, additional infrastructure
reductions could be possible. 


--------------------
\8 Defense Inventory:  DOD Actions Needed to Ensure Benefits From
Supply Depot Consolidation Efforts (GAO/NSIAD-92-136, May 29, 1992). 

\9 The decline in inventory requirements is based on DLA initiatives
that DLA believes will allow it to provide supply support without
holding costly inventories, drawing down troops, and disposing of
obsolete material.  DLA worked with the services to determine the
amount of inventory that could be reduced. 


      SERVICE/SUPPORT ACTIVITIES
-------------------------------------------------------- Chapter 7:3.4

The following service/support activities were evaluated in DLA's BRAC
selection process:  (1) the Defense Logistics Services Center (DLSC)
located in Battle Creek, Michigan; (2) the Defense Reutilization and
Marketing Service (DRMS) also located in Battle Creek, Michigan; and,
(3) the DLA Systems Design Center (DSDC) headquartered in Columbus,
Ohio, with 12 operational sites geographically dispersed throughout
the United States.  These activities were evaluated independently
because they do not have peer organizations within DLA and are unique
in terms of their nature, mission, and function.  On the basis of its
analysis, DLA decided not to recommend these three activities for
closure or realignment. 

DLA considered two different realignment alternatives that moved DLSC
from General Services Administration leased space in Battle Creek, to
DOD-owned property.  Military value analysis indicated that both
realignment scenarios were feasible, although COBRA results showed
that both produced relatively small savings.  However, since DLSC's
workload could be performed anywhere and officials could find no
clear reason why the activity should be realigned, DLA decided to
maintain the status quo. 

DLA considered two different realignment scenarios that moved DRMS
from GSA-leased space in Battle Creek, Michigan, to DOD-owned
property.  Military value analysis and COBRA results were similar to
those for DLSC.  Moreover, DLA determined that it did not make sense
to move DLSC or DRMS if a decision was not made to move both
activities. 

DLA considered two scenarios that involved realigning all or some of
DSDC's 12 satellite locations scattered throughout the United States. 
DLA decided that because these scenarios involved the movement of
fewer than the BRAC threshold of 300 authorized civilian personnel
and COBRA results showed modest savings, it would not make any
changes unless a host activity was being closed.  Thus, on the basis
of other DLA BRAC recommendations, the three satellite sites that
were tenants at the Defense Depot Memphis, Defense Depot Ogden, and
Defense Depot Letterkenny were identified for realignment to other
locations.  A total of 140 DSDC employees are to be relocated. 


   COST AS A FACTOR IN DLA
   DECISIONS
---------------------------------------------------------- Chapter 7:4

DLA considered the cost associated with its BRAC recommendations, but
this did not appear to be a significant factor in determining its
recommendations.  Table 7.3 displays the costs, savings, and ROI for
the nine activities DLA recommended for closure, realignment, or
disestablishment. 



                                    Table 7.3
                     
                      Estimated Costs and Savings Resulting
                          From DLA BRAC Recommendations

                      (Fiscal year 1996 dollars in millions)

                                               Recurring
                        One-time  6-year net      annual                 20-year
Activity                 costs\a   savings\b   savings\c  ROI years\        NPV\
--------------------  ----------  ----------  ----------  ----------  ----------
Defense Contract            $3.8       $17.9        $6.1           1       $75.8
 Management District
 South
Defense Contract             3.1         8.7         3.1           1        38.7
 Management Command
 International
Defense Contract            10.3        10.9         4.2   Immediate        51.2
 Management District
 West
Defense Industrial          16.9        59.3        18.4   Immediate       236.5
 Supply Center
Defense Distribution         7.9        51.2        11.6   Immediate       161.0
 Depot Columbus
Defense Distribution        85.7        14.8        23.8           3       244.3
 Depot Memphis
Defense Distribution       110.8      (27.8)        21.3           4       180.9
 Depot Ogden
Defense Distribution        44.9      (21.2)        12.4           3       102.1
 Depot Letterkenny
Defense Distribution        58.9        (.8)        18.9           2       186.1
 Depot Red River
================================================================================
Total                     $342.3      $113.0      $119.8                $1,276.6
--------------------------------------------------------------------------------
Note:  Totals may not compare to those in DOD's report due to
rounding. 

\a This represents unique one-time costs to implement the
recommendation. 

\b This represents net saving within the 6-year implementation
period. 

\c Projected recurring annual savings after the 6-year period. 


   CONCLUSIONS
---------------------------------------------------------- Chapter 7:5

The decision-making process that DLA employed to arrive at its 1995
BRAC recommendations was well documented and flowed logically from
the data presented.  Although DLA eliminated a sizable amount of
excess capacity with the closure and disestablishment of four depots,
it could reduce additional infrastructure in the future.  However,
such reductions are largely dependent on DLA and the services further
reducing their inventories. 


DEFENSE INVESTIGATIVE SERVICE
REQUESTED A CHANGE TO PRIOR BRAC
DECISION AFFECTING ITS LOCATION
============================================================ Chapter 8

DIS has recommended that its Investigations Control and Automation
Directorate (IC&AD) function be moved from Fort Holabird, Maryland,
to a newly constructed facility at Fort Meade, Maryland.  This move
would reverse a 1988 BRAC Commission decision that permitted DIS to
remain while other DOD entities moved from Fort Holabird.  A BRAC
team at DIS analyzed the proposed move and assessed its cost and
savings and economic impacts. 


   DIS RECOMMENDATION IS SUPPORTED
   BY ITS ANALYSIS
---------------------------------------------------------- Chapter 8:1

DIS currently has a building hosting 458 civilian employees on what
remains of Fort Holabird.  Fort Holabird was partially closed by the
1988 Commission, which, at DIS's request permitted it to remain.  DIS
will soon be the base's only tenant.  The building occupied by IC&AD
is old and needs refurbishment.  The Corps of Engineers surveyed the
building and documented many of its problems.  Identified hazards
include lead-based paint and asbestos, both of which would pose
significant health hazards should renovations begin while employees
remain in the building. 

DIS formed a BRAC working group and an executive group to assess the
need to move the Investigations Directorate to a new site.  The DOD
IG reviewed the working group's draft internal control plan, which
was then approved by the DIS BRAC Executive Group.  Through a
military value analysis, the Executive Group determined that the
Directorate could not perform its mission in a substandard facility. 

The Working Group considered the future DIS personnel and workload
requirements in its assessment of the size of any new site and the
necessity of a new building.  DIS queried the military services at
installations in the Baltimore/Washington area about the possibility
of moving IC&AD into existing space on those installations.  The
services indicated that no existing buildings would meet DIS
requirements.  The DIS Working Group then conducted cost and savings
analyses on three options:  (1) renovation of the existing building,
(2) movement of the Directorate into leased space, and (3)
construction of a new building on Fort Meade. 

The first option (renovation) would cost about $9.2 million and would
not produce a ROI for more than 100 years.  The second option (lease)
would produce annual lease costs of about $1.3 million and a return
on investment in 14 years.  The third option (construction of a new
building) would cost an estimated $9.4 million and produce a ROI in 5
years.  The construction option was determined to be the best from a
military value standpoint, as the Directorate's function would remain
in the Baltimore/Washington area with little or no disruption in the
work performed. 

The Executive Group approved the recommendation to move the IC&AD
function to a newly constructed building at Fort Meade.  The results
of a COBRA analysis showed the 6-year net cost to be $.48 million;
the annual savings in the years after implementation to be $.49
million; a ROI to be realized in 5 years; and the 20-year NPV to be
$4.23 million.  Most of the savings would result from avoidance of
the costs associated with the support services agreement between the
Army and DIS for the Fort Holabird building.  Since the construction
and move would take place within the same economic area, the economic
impact analysis indicated no impact associated with the
recommendation. 

The analyses performed by DIS were well documented.  The results of
its analyses support its subsequent recommendation.  In addition, the
DOD IG observed all stages of the DIS BRAC process, including its
assessment of the DIS internal control and analysis plans.  The DOD
IG also reviewed the data used by DIS in its military value, cost and
savings, and economic impact analyses. 


FUTURE DIRECTIONS
============================================================ Chapter 9

The 1995 BRAC is the last round of base closure reviews authorized
under the 1990 legislation.  Since excess infrastructure will likely
remain even if all current BRAC recommendations are adopted, future
BRAC rounds may be needed.  If a policy decision is made to continue
BRAC rounds, legislative authority, similar to the 1990 BRAC
legislation may be necessary to mitigate prior impediments to base
closures. 

The current and prior BRAC round recommendations, once implemented,
will reduce DOD's inventory of major domestic bases by 21 percent. 
On the other hand, DOD states that its budget request for fiscal year
1996, in real terms, is 39 percent below fiscal year 1985.  While
such data are not directly comparable, they suggest the need for
greater reductions in defense infrastructure and various base
categories show that excess infrastructure is expected to remain. 

In fact, the Secretary of Defense recently acknowledged that excess
infrastructure would remain after the 1995 BRAC.  He has suggested
the need for additional BRAC rounds in 3 to 4 years, after DOD
components have had a chance to absorb closures and realignments
under this and prior rounds.  The Chairman of the Joint Chiefs of
Staff, in March 1, 1995, testimony before the BRAC Commission, said
that excess capacity would remain after the 1995 BRAC.  He cited the
need for future base closure authority and said that opportunities
remain regarding cross-servicing, particularly in the area of
joint-use bases and training facilities.  He also noted that the
Commission on Roles and Missions was expected to recommend measures
to enhance efficiency and interoperability.  He indicated that
implementing those recommendations could require a process similar to
BRAC. 

Our examination of DOD's BRAC process, as well as other work underway
examining infrastructure, also suggests that costly excess
infrastructure could remain after the 1995 BRAC.  We also agree that
opportunities remain for significant consolidations that will not
only enhance joint operations but also reduce additional
infrastructure in the process. 

Our work in examining the 1995 BRAC recommendations, particularly in
identifying those not proposed by defense components, suggests that a
number of installations with relatively low military value were not
proposed for closure because of the significant up-front closure
costs, despite projecting savings in the long term.  Therefore, the
success of future BRAC rounds may be even more contingent on the
willingness of DOD to make these up-front investments. 

The current BRAC process may have certain weaknesses, but it has
proven to be an effective mechanism for reducing defense
infrastructure.  BRAC Commission deliberations in 1993 and 1995 have
included changes to prior BRAC round decisions, and future changes
are likely.  Since DOD cannot unilaterally change a BRAC Commission
decision, and the authority for the BRAC Commission soon expires, no
process will exist to authorize changes to prior decisions. 


   CONCLUSIONS AND MATTERS FOR
   CONGRESSIONAL CONSIDERATION
---------------------------------------------------------- Chapter 9:1

Excess infrastructure is expected to remain after the 1995 BRAC
process is completed, even if all of DOD's recommendations are
approved.  This could indicate the need for future BRAC rounds.  We
suggest that as the Congress considers the need for future defense
infrastructure reductions, it consider a process similar to that
authorized in the 1990 BRAC legislation.  In the meantime, the
Congress may wish to consider legislation to provide a process for
reviewing and approving changes to prior BRAC round decisions that
may encounter difficulties in implementation. 


OFFICE OF THE SECRETARY OF DEFENSE
BASE REALIGNMENT AND CLOSURE
DEFINITIONS
=========================================================== Appendix I

The following definitions were provided by OSD to the Department of
Defense components for use in the 1995 base closure and realignment
process.  The definitions remain unchanged from the 1993 process, and
are presented as stated by OSD. 


   CLOSE
--------------------------------------------------------- Appendix I:1

All missions of the base will cease or be relocated.  All personnel
(military, civilian, and contractor) will either be eliminated or
relocated.  The entire base will be excessed and the property
disposed.  Note:  A caretaker workforce is possible to bridge between
closure (missions ceasing or relocating) and property disposal which
are separate actions under Public Law 101-510. 


   CLOSE, EXCEPT
--------------------------------------------------------- Appendix I:2

The vast majority of the missions will cease or be relocated.  Over
95 percent of the military, civilian, and contractor personnel will
either be eliminated or relocated.  All but a small portion of the
base will be excessed and the property disposed.  The small portion
retained will often be facilities in an enclave for use by the
reserve component.  Generally, active component management of the
base will cease.  Outlying, unmanned ranges or training areas
retained for reserve component use do not count against the "small
portion retained." Again, closure (missions ceasing or relocating)
and property disposal are separate actions under Public Law 101-510. 


   REALIGN
--------------------------------------------------------- Appendix I:3

Some missions of the base will cease or be relocated, but others will
remain.  The active component will still be host of the remaining
portion of the base.  Only a portion of the base will be excessed and
the property disposed, with realignment (missions ceasing or
relocating) and property disposal being separate actions under Public
Law 101-510.  In cases where the base is both gaining and losing
missions, the base is being realigned if it will experience a net
reduction of DOD civilian personnel.  In such situations, it is
possible that no property will be excessed. 


   RELOCATE
--------------------------------------------------------- Appendix I:4

The term used to describe the movement of missions, units or
activities from a closing or realigning base to another base.  Units
do not realign from a closing or a realigning base to another base,
they relocate. 


   RECEIVING BASE
--------------------------------------------------------- Appendix I:5

A base which receives missions, units or activities relocating from a
closing or realigning base.  In cases where the base is both gaining
and losing missions, the base is a receiving base if it will
experience a net increase of DOD civilian personnel. 


   MOTHBALL, LAYAWAY
--------------------------------------------------------- Appendix I:6

Terms used when retention of facilities and real estate at a closing
or realigning base are necessary to meet the mobilization or
contingency needs of Defense.  Bases or portions of bases
"mothballed" will not be excessed and disposed.  It is possible they
could be leased for interim economic uses. 


   INACTIVATE, DISESTABLISH
--------------------------------------------------------- Appendix I:7

Terms used to describe planned actions which directly affect
missions, units or activities.  Fighter wings are inactivated, bases
are closed. 


THE JOINT CROSS-SERVICE GROUPS'
ANALYTICAL PROCESS
========================================================== Appendix II

Each cross-service group was composed of an executive group and one
or more working groups.  Senior OSD officials served as the
chairpersons of each executive group.  Representatives from each
service and other DOD officials were members.  Decisions were made at
the executive level, after receiving input from the working groups. 
The cross-service groups reported to the OSD steering and review
groups, which provided oversight and guidance (see ch.  3).  Table
II.1 lists the titles of the chairpersons of each cross-service
group. 



                          Table II.1
           
             Chairpersons of the Five Functional
                  Joint Cross-Service Groups

Cross-service
group               Chairperson
------------------  ----------------------------------------
Depot maintenance   Deputy Under Secretary of Defense for
                    Logistics

Test and            Director, Test, Systems Engineering, and
evaluation          Evaluation Director, Operational Test
                    and Evaluation

Laboratories        Director, Defense Research and
                    Engineering

Medical treatment   Assistant Secretary of Defense for
facilities          Health Affairs

Undergraduate       Deputy Under Secretary of Defense for
pilot training      Readiness
------------------------------------------------------------
The working groups were composed of technical experts from each of
the services and OSD.  They drafted the cross-service groups' data
calls and analyses plans, calculated the amount of excess capacity,
ranked all the activities under consideration, and prepared sets of
alternative workload transfers, closures, and realignments for
consideration by the services.  In general, the executive groups
approved products prepared by their working groups. 


   THE CROSS-SERVICE GROUP PROCESS
-------------------------------------------------------- Appendix II:1

OSD defined the cross-service process in a BRAC 1995 policy and
procedures memorandum, dated January 7, 1994; an internal control
plan for managing cross-service opportunities, dated April 13, 1994;
and policy memorandum number two on the analysis process, dated
November 23, 1994.  The following is a description of the
cross-service process in the order that the steps were taken.  Some
steps were taken by the cross-service groups; others were
accomplished by the services.  To ensure accuracy, the DOD IG audited
and reported on the cross-service groups' data analyses, and the
service audit agencies audited the data provided by the services. 


      DATA COLLECTION
------------------------------------------------------ Appendix II:1.1

Each cross-service group defined the functions that were candidates
for cross-service consolidation in the areas with which they dealt
and the sites that performed these functions.  Unlike the services,
which focused on bases or installations, the cross-service groups
focused on functions that were performed in two or more locations or
by two or more services or facilities with similar capabilities. 
Table II.2 shows the categories that each group selected for analysis
and the number of locations. 



                          Table II.2
           
            Categories for Analysis and Locations
             Selected by the Cross-Service Groups

Cross-service       Analysis
group               categories          Locations
------------------  ------------------  --------------------
Depot maintenance   57 commodities,     24 depots
                    such as aircraft
                    engines and
                    landing gear

Test and            Air vehicles,       23 activities\a
evaluation          electronic combat,
                    and armaments/
                    weapons

Laboratories        29 functions, such  81 laboratories
                    as avionics for
                    fixed-wing air
                    vehicles

Medical treatment   Number of           14 medical centers
facilities          operating beds      86 hospitals

Undergraduate       Undergraduate       12 installations for
pilot training      flying training in  fixed-wing aircraft,
                    10 functional       2 installations for
                    groupings           rotary-wing aircraft
------------------------------------------------------------
\a Unlike the other cross-service groups, the test and evaluation
group did not develop a list of activity locations to be included in
its study.  Instead, the group charged the military services with
determining which of their facilities should be included. 
Twenty-three activities were included in its final analysis. 

Like the services, the cross-service groups developed data calls to
obtain information for their BRAC analyses.  The cross-service groups
submitted their data calls to the services for distribution through
regular BRAC channels to the targeted activities in each service. 
Activities responded following the same procedures they used in
responding to the service data calls.  The services and their audit
agencies monitored the data collection phase. 


      CAPACITY ANALYSIS
------------------------------------------------------ Appendix II:1.2

Using data obtained in their data calls, the cross-service groups
computed the capacity of each site performing a specific function. 
Then they compared the capacity with the projected workload to
determine the amount of excess capacity in each of the functional
areas.  The amount of excess capacity depended on how much work was
planned and the measure of capacity employed.  Table II.3 shows how
much excess capacity each group identified and how each measured
capacity. 



                          Table II.3
           
                Amount of Excess Capacity and
            Methodology Used by Each Cross-Service
                            Group

                                       Methodology for
Cross-service   Amount of excess       measuring excess
group           capacity               capacity
--------------  ---------------------  ---------------------
Depot           40.1 million direct    Fiscal year 1999
maintenance     labor hours (equal to  capacity minus the
                24,830 work years).    core-funded work
                                       load\a for fiscal
                                       year 1999.

Test and        495,000 test hours.    Peak annual work load
evaluation                             between fiscal year
                                       1986 and 1993 minus
                                       projected work load
                                       of .72 times the
                                       average work load in
                                       fiscal years 1992 and
                                       1993.

Laboratories    9,800 work years.      Peak work years
                                       between fiscal year
                                       1986 and 1993, minus
                                       the 1997 requirement,
                                       minus 20 percent.

Medical         1 medical center is    Acute care occupancy
treatment       excess, and 2 medical  rate in fiscal year
facilities      centers and 13         1994 for each
                hospitals should be    facility compared to
                realigned.             the active duty and
                                       family population it
                                       serves within a 40-
                                       mile area projected
                                       to 1998-99.

Undergraduate   33 percent of          The number of
pilot training  available airfield     airfield operations
                operations for fixed-  for fixed-wing and
                wing aircraft and 108  ramp space
                percent of available   availability for
                ramp space for         rotary-wing aircraft
                rotary-wing aircraft.  needed to train the
                                       number of students
                                       required annually.
------------------------------------------------------------
\a The logistics capability maintained for national defense by DOD
activities (including personnel, equipment, and facilities) to ensure
the availability of a ready and controlled source of technical
competence and resources to provide an effective and timely response
to a mobilization, national defense contingency situations, and other
emergency requirements. 

The cross-service groups' data calls, like those used by the
services, were also keyed to obtaining information related to the
first four BRAC criteria dealing with military value.  The services
used these same criteria in completing the military value analyses of
installations and facilities in their basing categories.  The
cross-service groups used these criteria to assign a functional value
to each activity.  Functional values represented the value of
performing each function at each site in comparison with all sites in
a given category. 


      MILITARY VALUE ANALYSIS
------------------------------------------------------ Appendix II:1.3

The services computed the military value for each of their own
activities and provided this ranking to the cross-service groups. 
The services used their own procedures to assign military value, and
each was required to present the results on a scale of one (least
valuable) to three (most valuable).  The Air Force ranked its
activities in three tiers in lieu of military value. 


      CONFIGURATION ANALYSIS
------------------------------------------------------ Appendix II:1.4

Combining the functional values developed by the cross-service groups
and the military values provided by the services, a linear program
called the optimization model was used to derive sets of alternatives
for each cross-service group.  Other inputs to the model included
total capacity, capacity reduction goals, and the policy constraints
defined by each group and approved by the steering group.  Table II.4
shows some of the policy constraints employed by each cross-service
group. 



                          Table II.4
           
           Examples of Policy Constraints Employed
                 by the Cross-Service Groups

Cross-service
group               Policy constraint
------------------  ----------------------------------------
Depot maintenance   The Army, Navy, Marine Corps, and Air
                    Force will each retain at least one
                    depot to perform essential maintenance.

Test and            DOD will retain irreplaceable air, land,
evaluation          and sea space that will provide at least
                    one sea range and land range and at
                    least one of each type of topography and
                    climatology.

Laboratories        None.

Medical treatment   Facilities will remain open if they are
facilities          in an
                    underserved primary care area, acute
                    care beds in the community are
                    insufficient, or less than two
                    accredited acute care facilities are
                    available.

Undergraduate       There will be no helicopter training at
pilot training      sites with less than two auxiliary
                    fields.
------------------------------------------------------------
The model identified options for moving workloads based on the
criteria the groups wanted to optimize.  The model could provide
suggested workload transfers that would (1) minimize the number of
sites, (2) minimize the amount of excess capacity, (3) maximize the
average military value of all sites, or (4) maximize the average
functional value of all sites.  A group could also direct variations
that would, for example, eliminate as much excess capacity as
possible while maintaining an average functional value at least as
high as the original set of sites. 

The cross-service groups evaluated the feasibility of the various
sets of alternatives for closures, realignments, and workload
transfers.  Then the chairpersons provided what they considered to be
the best sets of options to the services for their consideration. 
Table II.5 summarizes the alternatives that the groups submitted to
the services. 



                          Table II.5
           
            Alternatives the Cross-Service Groups
                     Sent to the Services

Cross-service
group               Summary of alternatives
------------------  ----------------------------------------
Depot maintenance   Two options with some variations--both
                    would close eight depots, consolidate
                    about 13 work loads at single sites and
                    others at two or more sites.

Test and            Core alternatives: realign work load
evaluation          among five core activities, which are
                    part of the major range and test
                    facility base. Non-core alternatives:
                    realign work load from 11 activities to
                    core activities.

Laboratories        Consolidate broad functional areas of
                    work at major sites. Transfer 72
                    functional life cycle work load.

Medical treatment   Close 1 medical center;
facilities          realign 2 medical centers and 13
                    hospitals.

Undergraduate       Three options--close undergraduate pilot
pilot training      training at three, four, or five
                    installations.
------------------------------------------------------------
Air Force, Army, and Navy responses to each cross-service group's
proposals are summarized in chapters 4, 5, and 6, respectively. 


COST OF BASE REALIGNMENT ACTIONS
MODEL (COBRA)
========================================================= Appendix III

The COBRA model uses a set of formulas, or algorithms, that rely on
three types of data elements in its calculations:  base-specific
data, scenario-specific data, and standardized data.  Base-specific
data is applied to all closure and realignment scenarios involving a
given base.  Examples of base-specific data include base operating
and family housing costs.  Scenario-specific data changes for each
BRAC action and includes the number of personnel positions to be
eliminated or relocated and the amount of required military
construction.  Standardized data elements--or standard factors--are
common to a class of bases and are applicable for all scenarios that
involve those bases.  Some standard factors apply only to one DOD
component or a subset of a component's bases, while others are
applicable to all bases DOD-wide.  Average salaries and moving costs
are examples of standard factors used in the COBRA model. 


   IMPROVEMENTS TO MODEL HAVE BEEN
   MADE
------------------------------------------------------- Appendix III:1

The COBRA model has been used in the base closure process since 1988,
and in the intervening years it has been considerably revised to deal
with problems we and others identified after each BRAC round. 
Perhaps the most significant change was conversion of the original
LOTUS spreadsheet version to PASCAL programming language prior to
BRAC 1991.  This change prevented the model's algorithms from being
altered by anyone other than the model's programmers and better
ensured consistent application of the model.  Another major revision
allowed the user to enter costs and savings unique to a specific base
or scenario without deactivating the model's algorithms. 

Refinements to the model are initiated and controlled by a COBRA
Joint Process Action Team (JPAT).  The JPAT is comprised of
representatives from user organizations, including OSD. 

Some of the more significant enhancements that affected COBRA's
ability in BRAC 1995 to overcome weaknesses reported by us and others
in BRAC 1993 are shown in table III.1. 



                         Table III.1
           
            Some COBRA Improvements Affecting BRAC
                             1995

BRAC 1993 shortcoming          BRAC 1995 improvement
-----------------------------  -----------------------------
COBRA algorithms not           Key COBRA algorithms verified
independently verified.        by Army Audit Agency.

Inconsistency in cost data     Greater emphasis on
for certain factors.           standardized cost factors.

Unable to summarize cost and   Cost and savings data for
saving data for multiple       multiple scenarios can be
scenarios.                     aggregated.

ROI year is understated by 1   Calculation of ROI year has
year in an output report.      been corrected.

Inconsistent treatment of      All recurring costs and
recurring costs and savings.   savings are half-year in the
                               year of the BRAC action,
                               except base operating support
                               costs, which are full-year
                               and unique costs entered by
                               the user.

Time phasing of                Administrative planning and
administrative planning and    support costs are phased
support costs is evenly        according to the movement and
distributed.                   elimination of personnel.

Additional base operating      Model considers the impact of
support personnel required at  more base operating support
gaining bases are not          personnel.
identified.

Overhead savings for non-DOD   Overhead savings for non-DOD
salaried personnel are not     personnel are considered.
considered.
------------------------------------------------------------
Two of the more significant actions affecting BRAC 1995 are the
validation of the COBRA model and a greater emphasis on using
standardized cost factors. 

Errors discovered in COBRA formulas during prior BRAC rounds,
although corrected, indicated a need for COBRA's algorithms and
programming to be validated.  Thus, in 1994, the Army Audit Agency
agreed to examine whether the COBRA model accurately calculated cost
and savings estimates.  The audit agency tested four of the model's
algorithms against several of the Army's BRAC 1993 recommendations.\1
The Army Audit Agency concluded that the COBRA model correctly
calculated the cost and savings estimates. 

In earlier BRAC rounds, the DOD components frequently differed in the
values they assigned to COBRA standard factors.  Thus, in an effort
to minimize differences in BRAC 1995 the JPAT agreed on common values
for 36 standard factors, more than four times as many as in BRAC
1993.  Standardized factors introduced in BRAC 1995 included two
large areas--personnel and relocation costs.  The remaining standard
factors were developed independently by the DOD components to account
for differences deemed too large to standardize, such as factors for
construction, the percentage of officers and enlisted personnel who
are married, and permanent change of station costs. 


--------------------
\1 Tests were run on four of the model's algorithms:  (1) military
construction costs, (2) miscellaneous recurring costs, (3) civilian
salary savings, and (4) base operating support savings.  These areas
represented 54 percent of the costs and 81 percent of the savings
associated with the Army's BRAC 1993 recommendations. 


BASES AFFECTED BY THE SECRETARY OF
DEFENSE'S FEBRUARY 28, 1995, BASE
CLOSURE AND REALIGNMENT
RECOMMENDATIONS
========================================================== Appendix IV

This appendix shows, by military service and DOD agency, the bases
and activities that would be affected by the Secretary of Defense's
recommendations.  Table IV.1 shows the major bases that were
recommended for closure; table IV.2 shows the major bases that were
affected by realignment recommendations; table IV.3 lists the smaller
bases and activities that were affected by closures, realignments,
and other actions; and table IV.4 lists the changes to previously
approved BRAC recommendations. 



                          Table IV.1
           
             Major Bases Recommended for Closure

Service/
agency          Base/installation/activity
--------------  --------------------------------------------
Army            Fort McClellan, Alabama
                Fort Chaffee, Arkansas
                Fitzsimons Army Medical Center, Colorado
                Price Support Center, Illinois
                Savanna Army Depot Activity, Illinois
                Fort Ritchie, Maryland
                Selfridge Army Garrison, Michigan
                Bayonne Military Ocean Terminal, New Jersey
                Seneca Army Depot, New York
                Fort Indiantown Gap, Pennsylvania
                Red River Army Depot, Texas
                Fort Pickett, Virginia

Navy            Naval Air Facility, Adak, Alaska
                Naval Shipyard, Long Beach, California
                Ship Repair Facility, Guam
                Naval Air Warfare Center, Aircraft
                Division,
                Indianapolis, Indiana
                Naval Surface Warfare Center, Crane Division
                Detachment, Louisville, Kentucky
                Naval Surface Warfare Center, Dahlgren
                Division Detachment, White Oak, Maryland
                Naval Air Station, South Weymouth,
                Massachusetts
                Naval Air Station, Meridian, Mississippi
                Naval Air Warfare Center, Aircraft
                Division,
                Lakehurst, New Jersey
                Naval Air Warfare Center, Aircraft
                Division,
                Warminster, Pennsylvania

Air Force       North Highlands Air Guard Station,
                California
                Ontario IAP Air Guard Station, California
                Rome Laboratory, Rome, New York
                Roslyn Air Guard Station, New York
                Springfield-Beckley MAP, Air Guard Station,
                Ohio
                Greater Pittsburgh IAP Air Reserve Station,
                Pennsylvania
                Bergstrom Air Reserve Base, Texas
                Brooks Air Force Base, Texas
                Reese Air Force Base, Texas

Defense         Defense Distribution Depot, Memphis,
Logistics       Tennessee
Agency          Defense Distribution Depot, Ogden, Utah
------------------------------------------------------------


                          Table IV.2
           
           Major Bases Recommended for Realignment

Service/
agency          Base/installation/activity
--------------  --------------------------------------------
Army            Fort Greely, Alaska
                Fort Hunter Liggett, California
                Sierra Army Depot, California
                Fort Meade, Maryland
                Detroit Arsenal, Michigan
                Fort Dix, New Jersey
                Fort Hamilton, New York
                Charles E. Kelly Support Center,
                Pennsylvania
                Letterkenny Army Depot, Pennsylvania
                Fort Buchanan, Puerto Rico
                Dugway Proving Ground, Utah
                Fort Lee, Virginia

Navy            Naval Air Station, Key West, Florida
                Naval Activities, Guam
                Naval Air Station, Corpus Christi, Texas
                Naval Undersea Warfare Center, Keyport,
                Washington

Air Force       McClellan Air Force Base, California
                Onizuka Air Station, California
                Eglin Air Force Base, Florida
                Robins Air Force Base, Georgia
                Malmstrom Air Force Base, Montana
                Kirtland Air Force Base, New Mexico
                Grand Forks Air Force Base, North Dakota
                Tinker Air Force Base, Oklahoma
                Kelly Air Force Base, Texas
                Hill Air Force Base, Utah
------------------------------------------------------------



                          Table IV.3
           
           Smaller Bases and Activities Recommended
                  for Closure, Realignment,
               Disestablishment, or Relocation

Service         Base/installation/activity
--------------  --------------------------------------------
Army            Branch U.S. Disciplinary Barracks,
                California
                East Fort Baker, California
                Rio Vista Army Reserve Center, California
                Stratford Army Engine Plant, Connecticut
                Big Coppett Key, Florida
                Concepts Analysis Agency,
                Maryland\aPublications Distribution Center,
                Baltimore, Maryland
                Hingham Cohasset, Massachusetts
                Sudbury Training Annex, Massachusetts
                Aviation-Troop Command (ATCOM),
                Missouri\aFort Missoula, Montana
                Camp Kilmer, New Jersey
                Caven Point Reserve Center, New Jersey
                Camp Pedricktown, New Jersey
                Bellmore Logistics Activity, New York
                Fort Totten, New York
                Recreation Center #2, Fayettville, North
                Carolina
                Information Systems Software Command (ISSC),
                Virginia\aCamp Bonneville, Washington
                Valley Grove Area Maintenance Support
                Activity (AMSA), West Virginia

Navy            Naval Command, Control and Ocean
                Surveillance
                Center, In-Service Engineering, West Coast
                Division, San Diego, California
                Naval Health Research Center, San Diego,
                California
                Naval Personnel Research and Development
                Center,
                San Diego, California
                Supervisor of Shipbuilding, Conversion and
                Repair,
                USN, Long Beach, California
                Naval Undersea Warfare Center-Newport
                Division,
                New London Detachment, New London,
                Connecticut
                Naval Research Laboratory, Underwater Sound
                Reference Detachment, Orlando, Florida
                Fleet and Industrial Supply Center, Guam
                Naval Biodynamics Laboratory, New Orleans,
                Louisiana
                Naval Medical Research Institute, Bethesda,
                Maryland
                Naval Surface Warfare Center, Carderock
                Division
                Detachment, Annapolis, Maryland
                Naval Technical Training Center, Meridian,
                Mississippi
                Naval Aviation Engineering Support Unit,
                Philadelphia, Pennsylvania
                Naval Air Technical Services Facility,
                Philadelphia, Pennsylvania
                Naval Air Warfare Center, Aircraft
                Division,
                Open Water Test Facility, Oreland,
                Pennsylvania
                Naval Command, Control and Ocean
                Surveillance Center,
                RDT&E Division Detachment, Warminster,
                Pennsylvania
                Fleet and Industrial Supply Center,
                Charleston, South Carolina
                Naval Command, Control and Ocean
                Surveillance
                Center, In-Service Engineering East Coast
                Detachment, Norfolk, Virginia
                Naval Information Systems Management
                Center,
                Arlington, Virginia
                Naval Management Systems Support Office,
                Chesapeake, Virginia
                Naval Reserve Centers at:
                Huntsville, Alabama
                Stockton, California
                Santa Ana, Irvine, California
                Pomona, California
                Cadillac, Michigan
                Staten Island, New York
                Laredo, Texas
                Sheboygan, Wisconsin
                Naval Air Reserve Center, Olathe, Kansas
                Naval Reserve Readiness Commands
                New Orleans, Louisiana (Region 10)
                Charleston, South Carolina (Region 7)

Air Force       Moffett Federal Airfield AGS, California
                Real-Time Digitally Controlled Analyzer
                Processor Activity, Buffalo, New York
                Air Force Electronic Warfare Evaluation
                Simulator Activity, Fort Worth, Texas

Defense         Defense Contract Management District South,
Logistics       Marietta, Georgia
Agency          Defense Contract Management Command
                International, Dayton, Ohio
                Defense Distribution Depot, Columbus, Ohio
                Defense Distribution Depot, Letterkenny,
                Pennsylvania
                Defense Industrial Supply Center,
                Philadelphia, Pennsylvania
                Defense Distribution Depot, Red River, Texas

Defense         Investigations Control and Automation
Investigative   Directorate,
Service         Fort Holabird, Maryland
------------------------------------------------------------
\a This is a leased facility. 



                          Table IV.4
           
             Changes to Previously Approved BRAC
                       Recommendations

Service/
agency          Base/installation/activity
--------------  --------------------------------------------
Army            Army Bio-Medical Research Laboratory, Fort
                Detrick, Maryland

Navy            Marine Corps Air Station, El Toro,
                California
                Marine Corps Air Station, Tustin,
                California
                Naval Air Station, Alameda, California
                Naval Recruiting District, San Diego,
                California
                Naval Training Center, San Diego,
                California
                Naval Air Station, Cecil Field, Florida
                Naval Aviation Depot, Pensacola, Florida
                Navy Nuclear Power Propulsion Training
                Center,
                Naval Training Center, Orlando, Florida
                Naval Training Center, Orlando, Florida
                Naval Air Station, Agana, Guam
                Naval Air Station, Barbers Point, Hawaii
                Naval Air Facility, Detroit, Michigan
                Naval Shipyard, Norfolk Detachment,
                Philadelphia, Pennsylvania
                Naval Sea Systems Command, Arlington,
                Virginia
                Office of Naval Research, Arlington,
                Virginia
                Space and Naval Warfare Systems Command,
                Arlington, Virginia
                Naval Recruiting Command, Washington, D.C.
                Naval Security Group Command Detachment
                Potomac, Washington, D.C.

Air Force       Williams AFB, Arizona
                Lowry AFB, Colorado
                Homestead AFB, Florida (301st Rescue
                Squadron)
                Homestead AFB, Florida (726th Air Control
                Squadron)
                MacDill AFB, Florida
                Griffiss AFB, New York (Airfield Support
                for
                10th Infantry (Light) Division)
                Griffiss AFB, New York (485th Engineering
                Installation Group)

Defense         Defense Contract Management District West,
Logistics       El Segundo, California
Agency
------------------------------------------------------------

ECONOMIC IMPACT ASSESSMENTS
=========================================================== Appendix V

The economic impact on affected communities has been one of DOD's
eight criteria for making base closure and realignment decisions in
the current and two previous BRAC rounds.  DOD's sensitivity to this
issue has increased with each succeeding round, as the cumulative
impact of base realignments and closures has increased.  This has
caused DOD to strengthen its process for assessing potential economic
impact.  DOD also placed greater emphasis on aggregating the impacts
of tentative closure decisions across the services for the 1995
round, as well as assessing the cumulative impact of the current and
prior BRAC rounds.  Though not a precise predictor of outcome, the
methodology employed by OSD is considered a reasonable use of
existing tools of economic impact analysis. 


   ECONOMIC IMPACT ANALYSIS HAS
   IMPROVED OVER THE BRAC ROUNDS
--------------------------------------------------------- Appendix V:1

The services and defense agencies have been required to assess the
economic impact of their recommendations for potential closure or
realignment in each of the recent BRAC rounds.  Economic impact
assessments are intended to define the impact BRAC recommendations
could have on the affected community's economy in terms of total
potential job change (direct and indirect).  The assessments estimate
impact in absolute terms and as a percentage of employment in the
economic area.  An affected economic area is generally defined as a
metropolitan statistical area (MSA) or non-MSA county(s), unless
there is evidence calling for some other definition. 

Once the services and Defense agencies completed their economic
impact assessments, they were reported to OSD along with the BRAC
recommendations.  OSD then considered economic impact from a DOD-wide
perspective.  The extent to which either OSD or the services and
Defense agencies used the results of their analyses has varied in
each BRAC round. 


      1991 ROUND
------------------------------------------------------- Appendix V:1.1

In the 1991 BRAC process OSD guidance required the services to
consider the economic impact of proposed BRAC actions and report
their impact calculations, but it did not specify how this assessment
was to be used in the process.  As a result, the services differed in
the methods they employed and the extent to which they examined
economic impact.  However, economic impact was not a major factor for
any of the services in their decision-making processes in the 1991
round. 

A separate assessment was done by OSD, using the Office of Economic
Adjustment (OEA) to calculate the full impacts of actions proposed by
all DOD components.  The OEA methodology was derived with assistance
from the Logistics Management Institute (LMI), which was retained for
this purpose.  The methodology appeared sound, but we noted in our
1991 report that the definition of economic areas in some cases could
have overstated the potential impact.  For example, if a county was
identified as the economic area of a given base and that county was
rural, the impact may have been overstated if the base drew employees
from several counties.  Having completed an assessment of economic
impact, OSD did not use it to make any changes to the services'
proposed closures.  The cumulative impacts of the proposed 1991
actions were not considered significant because of the limited number
of BRAC actions up to that time. 


      1993 ROUND
------------------------------------------------------- Appendix V:1.2

In 1993 OSD guidance to DOD components included how economic impact
analyses were to be conducted but, again, did not specify how such
impact was to be considered in the overall decision-making process. 
The DOD components were mandated by OSD to use the approach developed
by OEA to calculate the direct and indirect employment impacts of a
potential closure or realignment.  Impacts were to be expressed in
terms of job changes as a percentage of area employment.  The issue
of cumulative impact became more important, because of the increased
numbers of recommendations.  When OSD considered the estimated impact
of all proposed actions in 1993, they established a standard against
which to evaluate economic impact.  Information from DOD components
was compiled into a master spreadsheet that calculated the cumulative
effect on an economic area of 1988, 1991, and recommended 1993
actions across all services and DOD agencies.  A job loss of 5
percent or greater in an area with 500,000 or more jobs was
determined by OSD to constitute the standard for unacceptable
economic impact. 

OSD subsequently used economic impact to cancel proposed closure
actions affecting Sacramento, California, without explicitly
addressing the implications for military value.  Alternative
candidates were not proposed, largely because DOD's consideration of
cumulative economic impact came too late in the 1993 process, which
made it difficult to assess alternative closure and realignment
scenarios. 

In our 1993 report we expressed concern about the subjective method
OSD used to derive its threshold for determining unacceptable
economic impact and the basis for not considering those areas whose
impact fell close to that threshold.  Further, there was no evidence
to support OSD's assumption that economic recovery would be more
difficult in a larger metropolitan area than in a smaller one.  In
reviewing DOD's proposed closures and realignments, the BRAC
Commission also expressed concern about how the economic impact
criterion had been applied.  Thus, the BRAC Commission recommended to
DOD that, in future, they state clearly that cumulative economic
impact alone would be insufficient cause for removing a base from
consideration without adequate military value justification. 


      1995 ROUND
------------------------------------------------------- Appendix V:1.3

On January 7, 1994, the Deputy Secretary of Defense established the
Joint Cross-Service Group on Economic Impact.  This group was the
vehicle through which the methodology for calculating economic impact
was derived.  The group was also responsible for the analysis of DOD
component recommendations in order to evaluate cumulative impacts. 
The issue of cumulative economic impact was important once again. 
The cross-service group was chaired by the Deputy Assistant Secretary
of Defense for Installations and included members from the military
departments and OEA. 

The cross-service group worked to refine the process of estimating
economic impact.  Its principal function was developing and refining
its approach and ensuring that it would be standard across all DOD
components.  Representation by all services on the cross-service
group greatly facilitated this. 

As was the case in 1993, DOD retained LMI to provide technical
assistance in developing a methodology and a computer database for
use in calculating impacts by the DOD components and the
cross-service group.  The cross-service group defined the geographic
areas they would use in the analysis process--in this case "economic
areas." If an installation was part of an MSA, as defined by OMB,
then the MSA was the economic area for analysis purposes.  The 1993
BRAC Commission recommended that DOD clarify and standardize its
geographic areas of measurement.  In response, DOD established a set
of rules for assigning installations to economic areas for BRAC 1995. 
For example, several MSAs were not appropriate for BRAC purposes in
that they did not reflect the locations where those affected by BRAC
actions live and work.  Input from the BRAC offices of the military
services on the geographic location of the military and civilian
personnel associated with particular bases helped further define
economic areas. 

The database program developed by the cross-service group and LMI was
constructed using the most recent information available from official
U.S.  government sources, such as the Bureau of Labor Statistics and
from the DOD components.  The resulting database was much larger than
that used in 1993, providing a more comprehensive set of basic
economic data more closely associated with each individual economic
area.  The military services provided basic information to the
cross-service group for input to the economic impact program.  This
input included such information as installation functions, base
personnel numbers, and base identification codes.  Each base or
installation was linked in the database to background and employment
information as well as economic indicators necessary to review
economic impact. 

The impact of a potential 1995 BRAC action, or actions, on an area is
measured in terms of direct and indirect job changes estimated for
1994 through 2001, expressed in absolute terms and as a percentage of
the total number of jobs in an economic area.  Direct job changes are
the estimated net addition or loss of jobs for military personnel,
DOD civilian employees, and on-base contractors that work in support
of the installation's military missions.  Such changes are directly
associated with base closures and realignments.  Indirect job changes
are the estimated net addition or loss of jobs in each affected
economic area that could potentially occur as a result of the
estimated direct job changes.  The cross-service group and LMI
developed multipliers as a means of gauging the effect of direct job
changes on surrounding communities.  For example, in one area, each
civilian DOD job may be estimated to create or support 1.5 jobs in
that area.  The numbers are different for each economic area.  Such
multipliers essentially represent the expected purchasing level in
the local economy of military personnel, military trainees, and
civilian DOD employees.  When multiplied by the number of people
moving out of an economic area due to a proposed closure, the
resulting figure represents an estimated decrease in the number of
jobs in that area. 

For purposes of deriving employment multipliers, DOD installations
were placed into two groups:  (1) facilities performing specialized
functions and (2) all others.  Military personnel, military trainees,
and civilian DOD personnel were assigned multipliers according to
their expected level of purchases in the local community. 
Multipliers for specialized installations were higher than other
installations due to the generally higher-skilled and higher-paying
positions associated with them.  Specialized installations were
further classified as depots, research and development facilities, or
ammunition production facilities.  Multipliers for the specialized
functions were based on the local economic activity patterns of
industries that perform similar functions.  Multipliers also vary
according to the size of the local economy, with larger economic
areas having larger multipliers.  This is because, in small areas, a
higher proportion of goods are imported into the area.  Using a
statistical technique, the cross-service group developed their
multipliers based on actual Department of Commerce multipliers for 53
communities.  The estimated values for the sample multipliers were
then adjusted upward so that the resulting multipliers would reduce
the likelihood that the process would underestimate the potential
employment effects of BRAC. 

The cross-service group asked the Bureau of Economic Analysis (BEA),
Department of Commerce, to provide an independent review of its BRAC
1995 multiplier methodology.  The BEA indicated that the
cross-service group methodology was sound and "consistent with good
regional economic impact estimation practices." They also recognized
that economic impact calculated using the cross-service group
multipliers would be overstated. 

Assessing economic impact in 1995 involved estimating the impact of
each recommendation on an economic area, the impact of all other BRAC
1995 recommendations on the same area, and the impact of previous
BRAC actions on that economic area.  In this round, the military
services were also to include in their estimates of 1995 impacts the
impacts of all previous BRAC actions, including those of other DOD
components.  In keeping with the recommendations of the 1993 BRAC
Commission, OSD stressed that the existence of economic impact on an
area due to actions in prior BRAC rounds or multiple 1995
recommendations would not, by itself, cause a recommendation to be
changed.  Priority was to be placed, once again, on military value in
making decisions or reexamining recommendations.  OSD also stated
that it would not establish threshold values. 

The impact of realized closures resulting from previous BRAC rounds
was based on consideration of historic economic data.  These included
changes in unemployment rates and per capita personal income for each
economic area from 1984 through 1993.  Historic economic data were
obtained by the cross-service group from the BEA and the Bureau of
Labor Statistics and were included in the database.  These economic
indicators provided an indication of the current economic condition
of each given area and recent trends in that condition and were
presumed to reflect the effects of previous BRAC actions on local
areas.  When considered with potential job changes from proposed 1995
actions, they were the principal means by which the cumulative impact
of proposed and past BRAC actions was considered.  Thus, an area
containing bases closed in 1989 and 1992 and a base recommended for
closure in 1995 could be assessed through its 1984 through 1993
unemployment rates, change in employment levels, and change in per
capita personal income in order to put any estimated 1994 through
2001 employment impacts into perspective. 

Once constructed, the database program was given to the services and
DOD agencies for their review.  Each of the services and DOD agencies
reviewed the program and discussed any necessary changes with the
cross-service group.  This process produced refinements in the
program, which was employed by every component in the BRAC process. 


   ECONOMIC IMPACT METHODOLOGY HAS
   LIMITATIONS BUT SEEMS
   REASONABLE FOR BRAC PURPOSES
--------------------------------------------------------- Appendix V:2

As was the case in previous BRAC rounds, there are many types of
models and computer-assisted tools in use by the private sector and
the government that could be used to estimate the economic impact of
base closures to some degree.  The methodology used by DOD in BRAC
1995 does have some limitations in that it does not fully account for
all impacts.  However, these limitations appear to be more than
offset by other factors that would overstate impact.  One limitation
in the program's data for BRAC 1995 was that current data was not
available on changes in military employment levels after 1992.  The
data used represented the most recent official U.S.  government
information available.  Data for 1993 and 1994 was still being
compiled and analyzed during the BRAC 1995 DOD deliberative process
and was therefore unavailable.  DOD was concerned about abandoning
its principle of relying on authoritative data by attempting to
project changes in employment data for the hundreds of economic areas
involved in BRAC 1995. 

Additionally, the database does not develop economic multipliers
individually for each economic area.  Using the BEA's multiplier
development technique for the large number of economic areas involved
in the BRAC process would have been time-consuming and expensive.  As
discussed earlier, DOD arrived at its multipliers by adjusting
current estimates upward.  This essentially increased the multipliers
for all economic areas and resulted in overstatement of impacts from
BRAC actions. 

The DOD database also does not consider factors that might offset
local impacts, such as the potential reemployment of separated
employees in other local area businesses, or possible civilian reuse
of closed facilities.  Thus, DOD's database is not the most accurate
tool for predicting the economic picture of areas that might
experience a closure or realignment.  A more accurate tool would be
much more complicated, employing more community-specific information. 
While such a tool might be more accurate, the DOD methodology's
relative simplicity and tendency to overstate the employment impact
on local areas seems reasonable for BRAC purposes in terms of
ensuring that the most severe potential impact is considered.  Also
important to DOD's estimation of economic impact is that the use of
the database applies a consistent analysis to all proposed actions. 

OSD's methodology for assessing economic impact was reviewed by an
independent panel of six government, academic, and private sector
economic experts in May 1994 and was found to be sound.  The panel
agreed that the use of direct and indirect job change was a
reasonable way to characterize the impact of proposed closures or
realignments and that DOD's planned use of historic data would
adequately capture the impacts of previous BRAC actions.  The
reviewers noted that the methodology did not account for any of the
ameliorating factors local areas would experience, such as land
reutilization or reemployment associated with any economic expansion
occurring in the area.  The reviewers concluded that since job change
multipliers were adjusted upward to avoid understating employment
impacts, the results of the analyses proposed by DOD would represent
a "worst-case" estimate of economic impact.  It is important to note
that the impact analysis done for BRAC is not a method for precisely
predicting the economic events of areas that may experience a closure
or realignment.  It considered only the effects of current BRAC
actions in the context of an areas historical economic condition,
rather than taking into consideration any mitigating factors. 

In addition to the independent review discussed above, the DOD IG
performed an audit of a sample of the computer program's data
elements in order to validate the multipliers and historic data in
the program.  This audit revealed a small number of instances of data
inaccuracy, none of which affected subsequent economic impact
calculations.  It also revealed an initial lack of documentation for
the sources of certain important data elements, such as unemployment
figures.  However, these issues were satisfactorily resolved by the
DOD IG, the cross-service group, and LMI. 


   DOD COMPONENTS AND OSD
   CONDUCTED ECONOMIC IMPACT
   ANALYSES
--------------------------------------------------------- Appendix V:3

As the military services began to develop their closure/realignment
scenarios, they used the database program to compute the economic
impact of their component-unique scenarios.  We found little
documentation indicating that DOD components eliminated potential
closure or realignment candidates from consideration for economic
impact reasons.  The only exceptions appeared to be in the Navy,
where the Secretary of the Navy expressed his intent to minimize
other closures in California if he recommended the closure of the
Long Beach NSY.  This prompted the Navy BSEC to keep several
activities open that they were prepared to recommend for closure (see
ch.  3).  The Navy also decided to keep PWC Guam open, in part due to
economic impact considerations.  Nevertheless, the BSEC believed
sufficient customers will remain on Guam to justify keeping the PWC
open. 

Once the services and DOD agencies submitted their recommendations to
the OSD, the cross-service group on economic impact collected and
merged the economic impact data files of each service and agency. 
The cross-service group then calculated updated values for cumulative
economic impact to account for multiple BRAC 1995 actions from
different DOD components in the same economic areas.  The chairman of
the cross-service group sent a memorandum to the services and defense
agencies requesting that they review their recommendations for those
installations located in areas with multiple BRAC 1995 actions.  The
services and defense agencies reviewed their recommendations in light
of the updated cumulative economic impact values and the other seven
criteria.  None decided to change its recommendations.  In examining
the cumulative impact data, OSD also determined that no changes were
required in the components' recommended closures and realignments. 


MAJOR CONTRIBUTORS TO THIS REPORT
========================================================== Appendix VI


   NATIONAL SECURITY AND
   INTERNATIONAL AFFAIRS DIVISION,
   WASHINGTON, D.C. 
-------------------------------------------------------- Appendix VI:1

Barry W.  Holman, Project Director
Claude T.  Adrien
Marian Harvey Bennett
David F.  Combs
Raymond C.  Cooksey
Julia C.  Denman
Raymond H.  Denmark
Stephen G.  Desart
Joseph W.  Kirschbaum
Andrew G.  Marek
Charles W.  Perdue
Kevin B.  Perkins
William E.  Petrick
Robert R.  Poetta
Marjorie L.  Pratt
Nancy L.  Ragsdale
Marc J.  Schwartz
Jacqueline E.  Snead
Jacob W.  Sprouse, Jr.
Celia J.  Thomas


   ATLANTA REGIONAL OFFICE
-------------------------------------------------------- Appendix VI:2

John M.  Ortiz
Bobby R.  Worrell


   CINCINNATI REGIONAL OFFICE
-------------------------------------------------------- Appendix VI:3

Frank Lawson


   DALLAS REGIONAL OFFICE
-------------------------------------------------------- Appendix VI:4

Larry J.  Junek
Enemencio S.  Sanchez
Cleofas Zapata, Jr. 


   LOS ANGELES REGIONAL OFFICE
-------------------------------------------------------- Appendix VI:5

Thaddeus S.  Rytel


   SAN FRANCISCO REGIONAL OFFICE
-------------------------------------------------------- Appendix VI:6

Floyd J.  Adkins
John P.  Kennedy


   HEALTH AND HUMAN SERVICES
   DIVISION
-------------------------------------------------------- Appendix VI:7

Stephen P.  Backhus
Timothy E.  Hall

