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BRAC Savings Estimates Were Flawed, Report Says

Government Executive - March 8, 2013, By Charles S. Clark

The 2005 Base Closure and Realignment Commission may have achieved recurring annual savings, but flawed cost estimates produced a doubling of anticipated expenses, the Government Accountability Office reported on Thursday.

Auditors also recommended improved methodology for predicting new costs in base construction, information technology and personnel during future BRACs.

“By implementing BRAC 2005, DoD closed 24 major bases, realigned 24 major bases, eliminated about 12,000 civilian positions, and achieved estimated net annual recurring savings of $3.8 billion,” GAO said. “However, the department cannot provide documentation to show to what extent it reduced plant replacement value or vacated leased space as it reported in May 2005 that it intended to do. Also, DoD did not establish a target for reducing excess infrastructure, as it did in the 1995 BRAC round.”

In projecting savings from base closings and related infrastructure adjustments, the Pentagon uses a quantitative model known as the Cost of Base Realignment Actions. Overall, GAO said, that tool is reasonable, but in many instances planners underestimated costs--military construction costs increased from $13.2 billion estimated by the BRAC Commission in 2005 to $24.5 billion after implementation ended in 2011.

“Most of this 86 percent increase was caused by requirements that were added or identified after implementation began,” GAO acknowledged, but other costs estimates rose because of initial under-estimates or failure to document all relevant inputs from staffing cuts and required IT improvements. “For example, the initial information technology cost estimate for one recommendation was nearly $31 million,” GAO said, “but implementation costs increased to over $190 million once those requirements were better defined.”

To improve the accuracy of projecting future BRAC savings, auditors recommended that the Office of the Secretary of Defense identify suitable measures of effectiveness in achieving savings and set a target for eliminating excess military infrastructure. GAO also recommended legislative changes to the BRAC statute to give Congress greater visibility of the potential savings.

Defense officials, reviewing a draft of the report, disagreed with five of its 10 recommendations, citing a need to stress military value over simple savings from capacity reductions, and attributing more of the changes in the estimates to requirements added later in the process.

The Obama administration, in its fiscal 2013 defense budget, asked Congress for a new BRAC round, but lawmakers were not receptive. Implementation costs of the 2005 round exceeded the initial 2005 estimate of $21 billion by 67 percent.

To view this article at the source publication, go to http://www.govexec.com/defense/2013/03/brac-savings-estimates-were-flawed-report-says/61768/.

The information above is for general awareness only and does not necessarily reflect the views of the Office of Economic Adjustment or the Department of Defense as a whole.