Military Real Property Maintenance: Improvements are Needed to Ensure
that Critical Mission Facilities are Adequately Maintained (Testimony,
10/26/1999, GAO/T-NSIAD-00-51).
Pursuant to a congressional request, GAO discussed the Department of
Defense's (DOD) maintenance of its real property, focusing: (1) whether
DOD has a comprehensive strategy to address its real property
maintenance needs; (2) how the services determine and prioritize
maintenance needs and allocate resources to them; (3) promising
practices in facilities maintenance by non-military entities that GAO
identified; (4) some barriers that the services face in implementing
such practices; and (5) GAO's recommendations on how DOD could improve
the management of its real property maintenance to assure that the
military's assets are maintained adequately and cost-effectively.
GAO noted that: (1) DOD does not have a comprehensive strategy for
managing its maintenance and repair needs; (2) although DOD planned to
pay for development of an overall real property maintenance plan in
fiscal year 1999, it shifted these funds to other priorities in early
1999; (3) similarly, although DOD instructed the services in 1997 to
provide sufficient funding by 2003 to meet three-fourths of their
estimated real property maintenance needs, DOD eliminated this goal in
1999, leaving it up to the services to decide how much to budget for
maintenance; (4) in the absence of a comprehensive DOD strategy, each
service sets its own standards for maintaining its property, using
different methods to assess property conditions, prioritize repairs, and
allocate funds for maintenance and repairs; (5) as a result, a barracks
rated "satisfactory" by one service could be rated as "unsatisfactory"
by another; (6) also, bases and major commands within services apply
their own rating criteria differently; (7) the services have different
maintenance funding goals through 2005 and plan to fund repairs below
the levels required to keep facilities at current conditions; (8)
therefore, the backlog of repairs, some rated critical, will increase;
(9) the amount varies by service; (10) GAO found a number of promising
practices in the maintenance area among nonmilitary entities, such as:
(a) using a single system for counting the number and type of
facilities; (b) having a single, engineering-based system for assessing
facility conditions, carried out by adequately trained personnel; and
(c) prioritizing budget allocations based on common criteria across all
facilities, including physical condition, relevance of facilities to the
mission, and life cycle costing and budgeting; (11) none of the military
services has implemented all the promising practices; and (12) adoption
of these practices is hampered by several barriers, including: (a) the
use of real property maintenance funds for other operations and
maintenance purposes; (b) differing standards among the services for the
square footage allotted to the same types of facilities (e.g., the
number of square feet per administrative worker), making it difficult to
control maintenance costs; (c) the use of multiple budget accounts to
pay for real property maintenance, which makes it difficult to determine
the total cost of maintaining facilities; and (d) incomplete and
non-comparable maintenance and repair data, which prevents meaningful
comparison by DOD and Congress of the urgency of the services' requests
for funding repairs.
--------------------------- Indexing Terms -----------------------------
REPORTNUM: T-NSIAD-00-51
TITLE: Military Real Property Maintenance: Improvements are
Needed to Ensure that Critical Mission Facilities are
Adequately Maintained
DATE: 10/26/1999
SUBJECT: Real property
Military facilities
Facility maintenance
Maintenance costs
Military budgets
Facility repairs
Private sector practices
Funds management
Federal property management
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Rev-LG logo.eps GAO United States General Accounting Office
Testimony Before the Subcommittee on Readiness and Management
Support, Committee on Armed Services, U. S. Senate
For Release on Delivery Expected at 2: 30 p. m., EDT Tuesday,
October 26, 1999
MILITARY REAL PROPERTY MAINTENANCE
Improvements Are Needed to Ensure That Critical Mission Facilities
Are Adequately Maintained
Statement of Kwai- Cheung Chan, Director, Special Studies and
Evaluations, National Security and International Affairs Division
GAO/T-NSIAD-00-51
GAO/T-NSIAD-00-51
Page 1 GAO/T-NSIAD-00-51
Mr. Chairman and Members of the Subcommittee: I am pleased to be
here today to share the results of our examination of the
management of real property assets by the Department of Defense
(DOD) and the military services. The military services are
collectively responsible for maintaining more real property than
any other entity in the world more than 320,000 buildings (with
about 2.1 billion square feet), tens of thousands of miles of
roads, and 1.1 million square yards of pavement (like runways).
The replacement value of this property is more than $500 billion.
Real property facilities maintained by the services include
barracks,
administrative space, classrooms, ports, hangars and runways,
roads and railroads, day care centers, schools and churches, and
utility structures and systems. The annual maintenance and repair
budget for these facilities has averaged about $5 billion for each
of the past 4 years (fiscal years 1996- 99). Separate accounts
fund maintenance and repair of family housing, many
industrial- related and military medical facilities. As you know,
DOD's management of its properties has been of longstanding
concern to the Congress. At your request, we reviewed DOD's
maintenance of its real property. We focused on the properties
that the services maintain and repair using funds from DOD's
operation and maintenance account. Real property maintenance
includes daily maintenance, small repairs, and minor construction.
My testimony today is based on our September 1999 report to you on
this subject. 1 I will discuss (1) whether DOD has a comprehensive
strategy to address its real property
maintenance needs; (2) how the services determine and prioritize
maintenance needs and allocate resources to them; (3) promising
practices in facilities maintenance by non- military entities that
we identified;
(4) some barriers that the services face in implementing such
practices; and (5) our recommendations on how DOD could improve
management of its real property maintenance to ensure that the
military's assets are
maintained adequately and cost- effectively. To meet our
objectives, we sent questionnaires to 571 military bases and major
commands worldwide; 93 percent of them responded. We visited 35
bases and commands nationwide to interview experts and DOD
maintenance and repair personnel. Our work was conducted from May
1997 through March 1999.
1 See Military Infrastructure: Real Property Management Needs
Improvement (GAO/NSIAD-99-100, Sept. 7, 1999).
Page 2 GAO/T-NSIAD-00-51
Results in Brief DOD does not have a comprehensive strategy for
managing its maintenance and repair needs. Although DOD planned to
pay for development of an overall real property maintenance plan
in fiscal year 1999, it shifted these funds to other priorities in
early 1999. Similarly,
although DOD instructed the services in 1997 to provide sufficient
funding by 2003 to meet three- fourths of their estimated real
property maintenance needs, DOD eliminated this goal in 1999,
leaving it up to the services to decide how much to budget for
maintenance.
In the absence of a comprehensive DOD strategy, each service sets
its own standards for maintaining its property, using different
methods to assess property conditions, prioritize repairs, and
allocate funds for maintenance and repairs. As a result, a
barracks rated satisfactory by one service could be rated as
unsatisfactory by another. Also, bases and major commands within
services apply their own rating criteria inconsistently, according
to responses to our questionnaire. Finally, the services have
different
maintenance funding goals through 2005 and plan to fund repairs
below the levels required to keep most facilities at current
conditions. Therefore, the backlog of repairs, some rated
critical, will increase. The amount varies by service.
We found a number of promising practices in the maintenance area
among nonmilitary entities, such as (1) using a single system for
counting the number and type of facilities; (2) having a single,
engineering- based system for assessing facility conditions,
carried out by adequately trained personnel; and (3) prioritizing
budget allocations based on common criteria across all facilities,
including physical condition, relevance of facilities to the
mission, and life- cycle costing and budgeting.
None of the military services has implemented all the promising
practices. Adoption of these practices is hampered by several
barriers, including (1) the use of real property maintenance funds
for other operations and maintenance purposes; (2) differing
standards among the services for the
square footage allotted to the same types of facilities (e. g.,
the number of square feet per administrative worker), making it
difficult to control maintenance costs; (3) the use of multiple
budget accounts to pay for real property maintenance, which makes
it difficult to determine the total cost of maintaining
facilities; and (4) incomplete and non- comparable maintenance and
repair data, and different criteria for prioritizing repairs,
which prevent meaningful comparison by DOD and the Congress of the
urgency of the services' requests for funding repairs.
Page 3 GAO/T-NSIAD-00-51
Because the services do not have accurate or consistent data, the
Congress does not know if it is funding maintenance and repairs
that will provide the best return on its investment. To improve
management of military real property maintenance, our September
1999 report recommended that the Secretary of Defense provide
funding for a comprehensive strategic real property maintenance
plan, and develop a cross- service integrated strategy, in close
coordination and consultation with the heads of facilities
infrastructure of each service, to comprehensively address real
property
maintenance issues. Background Congressional concerns about DOD's
and the services' management of real
property maintenance are long- standing, going back to the 1950s.
In the past decade, these concerns have focused in part on the
services' reported repair backlog, which increased 64 percent from
1992 through 1998, despite the Congress' net addition of more than
$800 million to the services' maintenance accounts during this
period to try to eliminate it. In addition, to address maintenance
issues comprehensively, the Congress provided DOD $50 million in
1992 to pilot test a common facility condition
assessment system. The system was to use common standards in order
to provide DOD with a single set of measures by which to compare
the maintenance needs of all service facilities, and to then
allocate resources on the basis of those needs. It was tested at
10 military installations from
July 1994 through April 1995. However, the services rejected the
system, citing the estimated cost of implementing it. Currently,
each service independently assesses facility conditions annually
and estimates the costs of required maintenance repairs. DOD Does
Not Have a
Comprehensive Maintenance Strategy
DOD does not have a comprehensive management strategy for
maintaining the services' real property. The 1999 DOD planning
guidance does not specify any funding level or goals for the
maintenance of property, other than stating that the services are
to fund maintenance at a level they consider adequate to execute
missions. In contrast, in 1996, DOD had
directed the services to provide sufficient funding to reverse the
deterioration of facilities, and to improve their effectiveness.
In 1997, DOD somewhat reduced that goal, by calling on the
services to fund just threefourths of their individually
determined maintenance requirements by 2003. However, the 1999
guidance has none of the 1996 or 1997 language. DOD told us that
this was a retreat from the earlier language, leaving it up to
individual commanders to decide what is adequate.
Page 4 GAO/T-NSIAD-00-51
Along these same lines, although DOD had funded development of a
strategic maintenance plan in its fiscal year 1999 budget, it
shifted the funding to other priorities in early 1999.
Services Use Different Rating Systems and Apply Them
Inconsistently
DOD does not have common criteria by which the services are to
rate the condition of their facilities, prioritize repair needs,
or allocate resources. Instead, each service has its own criteria
for assessing the condition of its properties and the urgency of
repairs, prioritizing maintenance needs, and deciding how much to
allocate for maintenance, thus making it difficult for DOD or the
Congress to prioritize requests for maintenance funding among the
services. As a result of the differences among the services'
systems, a facility rated as satisfactory by one service could be
rated as unsatisfactory by another. For example, the Air Force
system rates urgency of repairs in terms of impact on mission; 73
percent of Air Force
bases said that mission impact was the most important factor in
assigning a worst rating. In contrast, the Army's system rates
facility conditions and quantity, and only 29 percent of Army
bases said mission impact was the most important factor in
assigning a worst rating to a building. These
different systems make it difficult for DOD or the Congress to
compare the urgency of needed repairs among the services.
The services use the following contrasting systems: The Army
rates facility condition and quantity at three levels, from
worst (red), to fair (amber), to best (green). The Air Force
rates facilities' deficiencies with regard to their estimated
impact on four mission areas, at three levels (critical, degraded,
and minimal). The Navy uses an engineering- based assessment to
determine facilities' deficiencies; data are then used to rate the
deficiencies' impact on eight mission areas at four levels, from
C1 (has fully met demands) to C4 (has not met vital demands).
The Marine Corps uses a system similar to the Navy's, but uses 26
rather than 28 mission areas. In response to our survey, bases
within the same service and among the services showed varying
degrees of consensus in the ways they ranked reasons why
facilities received a worst rating. For example, 29 percent of the
Army bases reported conditions severely impede mission as a most
important reason for assigning a worst rating while 62 percent
ranked
this factor as of moderate importance. Similarly, 39 percent of
Air Force
Page 5 GAO/T-NSIAD-00-51
bases rated severe physical deficiency as a most important factor,
while 58 percent rated it as of moderate importance.
In addition, bases lack procedures to ensure that assessments of
facility conditions are valid and reliable, that is, that they
actually reflect the facilities' physical conditions. Fifty- five
percent indicated that they had no formal standardized procedures
to determine the reliability of inspectors' ratings.
Service Funding Plans May Lead to Increase in Backlogged Repairs
The total reported backlog of needed repairs increased from $8.9
to $14.6 billion (64 percent in nominal terms) from 1992 through
1998. 2 However, the services rate the urgency of their backlogs
differently and, in the absence of a single rating system, it is
not possible to determine the validity of the services' assessment
of the criticality of repairs, or to
prioritize spending among them. 3 The Air Force has three levels
of urgency for backlog (critical, degraded, minimal) and defines
critical as indicating a significant loss of installation mission
capability and frequent mission interruptions. The Navy has two
levels of urgency (critical and deferrable), reports only the
critical amount officially, and defines critical as those repairs
warranting fixing within 12 months. The Marine Corps reports all
identified deficiencies as backlog, and does not divide them into
categories.
The Army no longer officially reports a backlog figure reflecting
its own doubts about the validity of the estimates. Rather, it
calculates how much is required to sustain facilities at their
existing levels plus the cost of
renovations. Further increases in the services' backlogs are
projected to occur, given the services' plans to fund maintenance
and repair below identified needs over the next several years, as
follows:
The Air Force plans to spend no money at all on repair projects
until fiscal year 2003 (while providing an amount equal to 1
percent of total facility replacement value at each base for what
it terms preventive
2 A contributing cause may be, as we reported in 1997, that total
real property maintenance spending decreased 38 percent during
fiscal years 1987- 96, while the services reduced the square
footage they maintained only about 10 percent during the same
period. 3 The Air Force reported a total of $7. 4 billion in
needed repairs for fiscal year 1998, of which $355 million was
rated critical. The Navy reported a total of $6. 1 billion in
backlog, of which $2. 87 billion was rated critical.
Page 6 GAO/T-NSIAD-00-51
maintenance, such as painting, and for emergency minor repairs).
Although repair spending resumes in 2003, the Air Force estimates
that under this plan only 40 percent of critical or degraded
repairs will be addressed by 2005. The Navy reported that its
critical backlog will increase about
10 percent (from about $2.5 billion to about $2. 75 billion in
fiscal year 2003) under its current funding plan. The Navy's plan
will nearly eliminate the critical backlog in barracks but will
reduce it less in some others, such as administrative offices and
storage. The plan provides no funding to address the non- critical
backlog. The Marine Corps estimates that from fiscal year 1999
through fiscal year 2005, its backlog will increase 60 percent in
dollar value.
The Army plans to increase maintenance spending from 64 percent
of its minimum annual sustainment requirement to about 84 percent
of the requirement by 2005. However, this latter goal was reduced
from 91 percent in early 1999, and neither spending level provides
enough to maintain all facilities at existing conditions.
The services' future maintenance spending plans reflect the
services' longstanding practice of funding maintenance at levels
below identified requirements. The major commands do not request
the amount actually needed to accomplish required maintenance and
repairs because they
believe that their headquarters will not fund maintenance at that
level. We found little relationship between the services'
identified maintenance and repair needs and the funds requested to
address those needs. Bases reported to us on the survey we sent
them that they received 16.2 percent of known maintenance needs
from their commands in fiscal year 1997
($ 3.8 billion of $23.5 billion). Army bases reported that they
received funding equal to 15. 4 percent of their needs; Air Force
bases received 18. 3 percent; Navy bases, 14. 2 percent; and
Marine Corps, 28 percent.
According to headquarters facility management officials of each
service, funding maintenance is not their service's first
priority. The major commands and bases understand this and have
acted accordingly as
reflected in the data reported to us by the commands and the
bases. For example, base officials said that in their view service
headquarters do not adequately consider maintenance and repair
needs identified during the assessment process in making decisions
about budget and allocation of resources. In light of the lack of
connection between the assessments,
requests, and actual subsequent funding allocations, some base
officials questioned the wisdom of expending resources on annual
assessments of maintenance and repair needs.
Page 7 GAO/T-NSIAD-00-51
Although each service funds maintenance at levels well below
estimated needs, the lack of consistency in rating repair needs
across and within the services makes it difficult to determine how
urgent these needs truly are. Therefore, simply providing
additional funding will not ensure that the most important
deficiencies are funded first, or that buildings with repair needs
exceeding a large percentage of their replacement value should not
be demolished instead (saving money in the long run). In the
absence of a common rating system, neither the Office of the
Secretary of Defense nor the services can meaningfully prioritize
the services' maintenance and repair funding requests. Nor can
they be assured that if more funds were provided that they would
be targeted to those facilities that are both needed to carry out
critical missions and in greatest need of repair.
Promising Practices in Facilities Management In interviews with
non- military entities and maintenance experts, we were
told of a number of promising practices in the repair and
maintenance area, including
using a single system for counting the number and type of
facilities; having a single, engineering- based system for
assessing facility
conditions by adequately trained personnel; prioritizing budget
allocations based on physical condition, relevance of facilities
to the mission, and life- cycle costing and budgeting; 4
using a single property maintenance budget that is controlled by
a central office with the power to shift resources to facilities
in the greatest need; creating incentives to demolish or vacate
excess space; restricting the use of maintenance funds to
maintenance purposes; and allowing maintenance management offices
to charge tenant entities an
annual maintenance fee, based on square feet used, to ensure
adequate funding for facilities and to create an incentive for
space conservation. Two nonmilitary organizations the Capital
Needs Analysis Center of the Church of Latter- day Saints at
Brigham Young University and Lawrence Livermore National
Laboratory have facility management systems that collectively use
all of these practices. Both report these practices enable
4 Life- cycle facility management is a methodology aimed at
maximizing cost- effectiveness. As described by the National
Research Council, building service life can be optimized through
adequate and timely maintenance and repairs. National Research
Council, Stewardship of Federal Facilities (Washington D. C.:
National Academy Press, Oct. 1998), p. 12.
Page 8 GAO/T-NSIAD-00-51
them to: maintain needed facilities at agreed upon standard
levels; stabilize repair backlogs (but requiring supplemental
funding to fix existing backlog); and accurately predict future
maintenance needs, satisfy customers that maintenance funds are
allocated fairly and based on actual need, and prepare credible
budget requests. Similarly, a military
organization the U. S. Army Health Facility Planning Agency is
implementing a life- cycle investment strategy that it expects to
reduce major repair costs by 50 percent and cut programming time
from years to months.
Obstacles to Effective Implementation by the Services of Promising
Practices
None of the military services have implemented all the promising
practices identified to us by the non- military organizations.
Adoption of these practices is hampered by several barriers.
First, DOD lacks basic data that would permit it to compare how
much the services spend per square foot on barracks or other
common buildings, such as administrative offices,
classrooms, and warehouses. While the Army annually collects per
square foot spending data for more than 100 types of structures,
we did not find comparable data collected by the other services.
Second, repair and maintenance funds are frequently used for other
purposes, such as unfunded emergency military overseas operations,
reducing the amount available for maintenance, as well as creating
budgeting and contracting instability. Third, multiple accounts
are used to pay for maintenance and repair; the Army pays for
maintenance from 27 different accounts; and the Center for Naval
Analyses found that the Navy had 110 different accounts for
maintenance use in 1995. As a result of
these multiple accounts, funding for real property maintenance is
fragmented, creating problems in determining how much is actually
being spent. Fourth, the services have different coding schemes to
record the number and type of their facilities; as a result, this
information is not comparable across the services. Without valid,
reliable data, DOD and the services cannot adequately evaluate the
cost- effectiveness of real property management or even know how
much is being spent on maintenance and repair.
Fifth, there are no per square foot space standards among the
services to determine whether a service is using much more space
per worker than other services for similar functions. Common
standards are useful in
managing space utilization and controlling costs, since less space
use
Page 9 GAO/T-NSIAD-00-51
reduces maintenance needs. For example, the Army allocates 162
square feet per administrative worker; the Navy and the Marines
allocate 110 to 150 square feet, depending on grade level.
Although some facilities will always be service- unique (e. g.,
nuclear submarine repair facilities; intercontinental ballistic
missile silos), many (such as barracks, standard classrooms,
administrative space, and family housing) are common across the
services. The Army uses its standards to determine whether more
space than required per worker is being used at bases, to help set
maintenance budgets.
In addition, we found the services management of repair and
maintenance to be hindered by
legal and administrative restrictions of the National Historic
Preservation Act and the McKinney Act 5 that, while having
distinct purposes, may hamper the services' ability to cost-
effectively address maintenance issues and insufficient training
of personnel involved in assessing facility
conditions, potentially resulting in inconsistent and unreliable
determinations of repair requirements.
Recommendations On the basis of our review, we recommended in our
September 1999 report that the Secretary of Defense improve DOD's
management of repair and
maintenance activities. Specifically, we recommended that DOD fund
development of a DOD strategic maintenance plan, as had been
originally provided in 1999. We also recommended that DOD develop
a cross- service
integrated strategy, in close coordination and consultation with
the heads of facilities of each service, to comprehensively
address repair and maintenance issues. The strategy should
provide, at a minimum, for
uniform standards that set the minimum condition in which
military facilities are to be maintained and standardized
condition assessment criteria;
5 The National Historic Preservation Act (16 U. S. C. 470h- 2)
governs the preservation of historic buildings and can prevent the
services from demolishing a historic building. The McKinney Act
(16 U. S. C. 1141) requires DOD to work with the Department of
Housing and Urban Development to determine whether unused or
underused facilities scheduled to be demolished are suitable for
use by the homeless.
Page 10 GAO/T-NSIAD-00-51
standard criteria by which the services are to allocate space for
different types of facilities (e. g., barracks, classrooms,
administrative buildings) and against which maintenance funding
allocations will be measured; standard criteria for counting the
number and type of facilities; computerized, on- line inventory
and cost databases that permit meaningful comparisons, across and
within the services, of repair and
maintenance spending by type, size, and location of facility and
repair and maintenance activity, including direct data access by
DOD headquarters; standard cost accounting methods by which the
services will record and
track their maintenance expenditures so that they and DOD know how
much is being spent, where it is being spent, and on what type of
facility or repair activity it is being spent on, by common
metric; the identification of priorities for the services to use
to explicitly link needs assessments with resource allocations and
tracking systems that show whether or not identified high priority
needs are allocated the funds intended for them by the Congress;
mandated training standards (curriculum and hours) for all those
involved in condition assessment and ratings of repair urgency;
and a comprehensive, valid, engineering- based assessment system
that incorporates life- cycle planning into facilities maintenance
based on the
well- developed methods already used by nonmilitary entities. In
addition, we noted that the Department's repair and maintenance
strategy needs to deal with the issue of funding instability,
particularly the migration of maintenance funds to non-
maintenance uses. In this regard, we suggested that the Department
consider the feasibility of adopting the promising practices used
by some non- military organizations. To the extent that adoption
of any of these practices would require changes to existing law,
we recommended that the Department develop a legislative proposal
for submission to the Congress. DOD stated that overall, our
report provides a good review of the Department's real property
maintenance program. DOD agreed with most of our recommendations
but stated we did not give adequate credit to the services for
their work in better defining real property maintenance
requirements and allocating funding. DOD disagreed with the need
to establish standard cost accounting methods because it would
impose too great a level of detail and to develop mandated
training standards for personnel involved in real property
maintenance assessments because DOD is not certain such training
is needed. Finally, DOD disagreed with our recommendation to
restrict the use of maintenance funds to maintenance
Page 11 GAO/T-NSIAD-00-51
purposes, stating that it would excessively curtail the
flexibility of commanders. We continue to believe these measures
are needed to provide DOD with adequate oversight and consistency
in identifying and prioritizing real property maintenance and
repairs, as well as to assure that funds allocated for maintenance
are used as intended by the Congress.
Mr. Chairman, this concludes my statement. I will be happy to
answer any questions you may have.
Contacts and Acknowledgments For future contacts regarding this
testimony, please contact Kwai- Cheung Chan at (202) 512- 3092.
Individuals making key contributions to this testimony included
Dr. Jonathan R. Tumin and Dr. Sushil K. Sharma.
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