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entitled 'Military Base Closures: Observations on Prior and Current 
BRAC Rounds' which was released on May 3, 2005.

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Statement Before the Defense Base Closure and Realignment Commission:

For Release on Delivery Expected at 9:30 a.m. EDT Tuesday, May 3, 2005:

Military Base Closures:

Observations on Prior and Current BRAC Rounds:

Statement of Barry W. Holman, Director, Defense Capabilities and 
Management:

[Hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-05-614]:

GAO Highlights:

Highlights of GAO-05-614, a statement before the Defense Base Closure 
and Realignment Commission:

Why GAO Did This Study:

The Defense Base Closure and Realignment Act of 1990, as amended, 
authorized a new round of base realignment and closures (BRAC) in 2005, 
the fifth such round in recent years but the first since 1995. The 
legislation requires the Secretary of Defense to submit his list of 
bases recommended for closure and realignment to an independent BRAC 
commission by May 16, 2005. The Commission is charged with reviewing 
these recommendations and submitting its report with recommendations to 
the President for his acceptance or rejection of them in their entirety 
by September 8, 2005. Subsequently, Congress has final action to accept 
or reject the recommendations in their entirety later this year. By 
law, GAO is mandated to review the Department of Defenseís (DOD) 
process and recommendations and to report its findings by July 1, 2005.

For the inaugural hearing of the 2005 BRAC Commission GAO was asked to 
address: (1) the status of implementing recommendations from previous 
BRAC rounds, (2) DODís expectations for the 2005 BRAC round, and (3) 
the analytical framework for the 2005 BRAC round. GAO offers some 
suggestions for the Commission to consider as it prepares for the 2005 
BRAC round.

What GAO Found:

DOD indicates that recommendations from the previous BRAC rounds were 
implemented within the 6-year period mandated by law. As a result, DOD 
estimated that it reduced its domestic infrastructure by about 20 
percent; about 90 percent of unneeded BRAC property is now available 
for reuse. Substantial net savings of approximately $29 billion have 
been realized over time. Most communities surrounding closed bases are 
continuing to recover from the impact of BRAC and faring well compared 
with average U.S. rates for unemployment and income growth. In 
examining DODís proposed closures and realignments, the Commission may 
want to ensure that all proposed closure and realignment actions can be 
implemented within the mandated 6 year period recognizing property 
transfers may take longer.

DODís expectations for the 2005 BRAC round include the traditional 
emphasis on eliminating unneeded infrastructure and achieving savings. 
It also expects to use BRAC to further transformation and related 
efforts such as restationing of troops from overseas as well as efforts 
to further joint basing among the military services. DODís preliminary 
assessment of excess capacity completed outside the BRAC process in 
2004 to help justify the 2005 round has led to much speculation about 
the percentage of bases likely to close. While DODís assessment gave 
some indication of excess capacity across certain functional areas, 
GAOís assessment showed the methodology had significant limitations, 
such as use of varying capacity metrics among the military services for 
similar type facilities. As a result, it is difficult to use that data 
to make a reliable projection of total excess capacity across DOD, or 
projections of number of bases likely to close. Further, the 
methodology neither fully considered the potential impact of major 
force structuring and other rebasing changes nor the impact of 
analyzing facilities or functions on a joint or cross-service basis, a 
priority for the 2005 round. As a result, we await the results of DODís 
proposed closures and realignments to see the extent of potential 
capacity reduction and how the results of this round compare with prior 
rounds. The Commission may want to look at such measures as projected 
net reduction in plant replacement value or square footage of space as 
reduction indicators.

The 2005 BRAC round process follows a historical analytical framework 
with many elements of the process being carried forward or building 
upon lessons learned from the past. A key part of that framework is the 
selection criteria which essentially follow a framework similar to that 
employed in prior BRAC rounds, with more specificity in selected areas 
mandated by Congress. The Commission may want to be aware of changes 
for the 2005 round based on lessons learned from the past related to 
such issues as privatizing functions in place as a closure option, 
considering total cost to the government in evaluating closure and 
realignment recommendations, clarifying the size of reserve enclaves 
that may be created, and strengthening the emphasis on cross-servicing 
of selected functions and increased jointness in basing decisions.

www.gao.gov/cgi-bin/getrpt?GAO-05-614.

To view the full product, including the scope and methodology, click on 
the link above. For more information, contact Barry Holman at (202) 512-
5581 or holmanb@gao.gov.

[End of section]

Mr. Chairman and Members of the Commission:

I am pleased to have the opportunity today to provide you with an 
overview of our work involving the Department of Defense's (DOD) base 
realignment and closure (BRAC) process and give some context for the 
challenging task before you through a retrospective view of prior 
rounds and some perspectives on the unfolding 2005 round that the BRAC 
Commission may want to consider. My testimony today addresses the (1) 
status of implementing the recommendations from the four prior BRAC 
rounds; (2) Secretary of Defense's expectations for BRAC 2005 and the 
difficulty in getting a handle on the amount of excess capacity that 
may be reduced; and (3) analytical framework for the previous and 
current BRAC process, and how changes related to the 2005 round could 
affect the work of this year's Commission.

GAO has played a long-standing role in the BRAC process. As requested 
by congressional committees (1988 BRAC round) or mandated by law since 
1990, we have served as an independent and objective observer of the 
BRAC process and have assessed and reported on DOD's decision-making 
processes leading up to proposed realignment and closure 
recommendations in each of the four prior rounds. To make informed and 
timely assessments, we have consistently operated in a real-time 
setting since the 1991 BRAC round and have had access to portions of 
the process as it has evolved, thus affording the department an 
opportunity to address any concerns we raised on a timely basis. We 
have been observing the 2005 BRAC process since DOD's initial work 
began on the 2005 round. Because of our ongoing monitoring of DOD's 
BRAC 2005 process, and some access to the internal workings of that 
process, any comments by me today regarding specifics of the 2005 round 
must of necessity be somewhat limited because of nondisclosure 
requirements that remain in place until DOD releases its list of 
recommended closures and realignments later this month.

In preparing this testimony, we relied largely on our prior work 
related to assessing BRAC decision-making processes and implementation 
of the previous four rounds. Appendix I has a listing of our previous 
reports on the base realignment and closure process. Our previous work 
was performed in accordance with generally accepted government auditing 
standards.

Summary:

DOD reported that as of September 30, 2001, it had taken all necessary 
actions to implement the recommendations of the BRAC Commissions for 
the four prior rounds. As a result, DOD estimated that it had reduced 
its domestic infrastructure by about 20 percent measured in terms of 
facilities plant replacement value.[Footnote 1] The following summarize 
the status of recommendations with respect to property transfer, 
savings, and economic recovery of communities affected by the last four 
rounds.

* BRAC recommendations were implemented within the 6-year period 
mandated by law. As of September 2004, DOD data show that about 72 
percent (about 364,000 acres) of the approximately 504,000 acres of 
unneeded BRAC property from the previous four rounds had been 
transferred to other federal and nonfederal entities.[Footnote 2] When 
leased acreage is added to property that has already been transferred, 
the amount of unneeded BRAC property that is available for reuse rises 
to 90 percent. About 140,000 acres have not yet been transferred, 
primarily because of delays resulting from environmental cleanup 
requirements that DOD is obligated to address to ensure that former 
base property is cleaned up to a level sufficiently safe for its 
intended reuse. In looking at the Secretary of Defense's 
recommendations for the 2005 BRAC round, the Commission may want to 
assure itself that all proposed closure and realignment actions can be 
implemented within the mandated 6-year period. Property transfers are 
not subject to the 6-year implementation period.

* Based on our analysis of DOD data, the department generated 
substantial net estimated savings (estimated total savings minus costs) 
of about $29 billion through fiscal year 2003 from the previous four 
BRAC rounds, and it expects to save about $7 billion annually 
thereafter. Our work has shown that these savings actually reflect cost 
avoidances, that is, money that DOD would likely have needed to operate 
BRAC bases had they remained open. At the same time, our reviews have 
found that DOD's savings estimates are not precise but instead rough 
approximations of the likely savings, in part because the military 
services have not regularly updated their estimates over time and 
because DOD's accounting systems are not oriented toward identifying 
and tracking savings. From the BRAC Commission perspective, it is 
important to note that historically most reported DOD savings result 
from reductions in operation and maintenance and military personnel 
costs.

* Most communities surrounding closed bases are continuing to recover 
from the impact of BRAC. DOD data show that almost 85 percent of local 
DOD civilian jobs that were lost on bases as a result of realignments 
and closures have been replaced through development of the properties. 
Two key economic indicators--the unemployment rate and the average 
annual real per capita income growth rate--show that BRAC communities 
are generally doing well when compared with average U.S. rates. As we 
have reported in the past, the recovery process has not necessarily 
been easy with the strength of the national economy and the diversity 
of local economies having a significant bearing on the recovery of any 
particular community facing a BRAC closure. From the BRAC Commission 
perspective, few bases were eliminated from closure or realignment in 
prior rounds due to economic impact, but this is an issue the 
Commission will hear much about as it engages communities affected by 
the Secretary's proposed closures and realignments.

DOD's expectations for the 2005 BRAC round include the traditional 
emphasis on eliminating unneeded infrastructure and achieving savings, 
but they also extend to using BRAC to further transformation efforts 
such as restationing of troops from overseas as well as improving joint 
basing among the military services. Nevertheless, much emphasis has 
been given to estimating the amount of excess capacity in advance of 
the BRAC round and that has led to much speculation about the number or 
percentage of bases that are likely to close. That is a tougher issue 
to deal with than it might seem on the surface as evidenced by an 
earlier assessment of excess capacity that DOD was required to complete 
in advance of the BRAC round. The results of that analysis were 
included in a 2004 report to Congress[Footnote 3] in justifying the 
need for the 2005 BRAC round. While that report did give indications of 
excess capacity, our work shows the analysis did not give a well-
grounded assessment of total excess capacity across DOD or the 
potential for achieving greater efficiencies in use of that capacity. 
It has also led to much speculation on the number of bases likely to be 
closed in this BRAC round. Our analysis indicated that DOD's 
methodology for that report had limitations, such as use of varying 
capacity metrics among the military services for similar type 
facilities, that made it difficult to get a precise reading on excess 
capacity across various functional areas, and made it even more 
difficult to credibly project a total amount of excess capacity across 
DOD. Moreover, in completing its analysis, the military services 
assessed their bases as though they were being used for a single 
function, and did not consider either the existing or the potential for 
increased multi-functional/joint use that was identified as an 
objective of the 2005 BRAC round--and which provides the potential for 
better identifying excess capacity or opportunities to use existing 
capacity more efficiently for multiple purposes. As a result, we must 
await the results of DOD's proposed closures and realignments to see 
the extent of capacity reductions and to determine how this round 
compares with prior rounds in that regard. The Commission may want to 
look at such measures as projected net reduction in plant replacement 
value or square footage of space as meaningful indicators of the 
magnitude of reductions in BRAC 2005.

The BRAC process follows a historical analytical framework with many 
elements of the process being carried forward or building upon lessons 
learned from previous rounds. First, the selection criteria essentially 
follow a framework that is similar to that employed in previous BRAC 
rounds, with more specificity in selected areas--especially in those 
that speak to military value. In this regard, the criteria give 
priority to military value and incorporate such factors as joint 
warfighting, training, readiness, and the ability to accommodate 
contingency and mobilization requirements, as is called for in the 
fiscal year 2002 legislation.[Footnote 4] In addition, the 2005 round 
is expected to incorporate several lessons learned from the previous 
rounds, such as privatizing functions in place rather than closing 
facilities and moving affected work to other locations, not always 
considering total cost to the government when examining individual 
closure or realignment decisions, clarifying the size of reserve 
enclaves that may be created when bases are closed or realigned, and 
strengthening the role of the joint cross-service teams.

Background:

To enable DOD to close unneeded bases and realign other bases, Congress 
enacted legislation that instituted BRAC rounds in 1988, 1991, 1993, 
and 1995.[Footnote 5] A special commission established for the 1988 
round made realignment and closure recommendations to the Senate and 
House Committees on Armed Services. For the 1991, 1993, and 1995 
rounds, special BRAC Commissions were set up, as required by 
legislation, to make specific recommendations to the President for his 
approval, who in turn sent the Commissions' recommendations to 
Congress. The four Commissions generated 499 recommendations--97 major 
closures and hundreds of smaller base realignments, closures, and other 
actions.[Footnote 6] Of the 499 recommendations, 451 required action; 
the other 48 were modified in some way by a later commission. DOD was 
required to complete BRAC realignment and closure actions for the 1988 
round by September 30, 1995, and for the 1991, 1993, and 1995 rounds 
within 6 years from the date the President forwarded the recommended 
actions to Congress.

Legislation authorizing the BRAC rounds has also stipulated that 
closure and realignment decisions must be based upon selection 
criteria, a current force structure plan, and infrastructure inventory 
developed by the Secretary of Defense. Further, the selection criteria 
were required to be publicized in the Federal Register to solicit 
public comments on the criteria before they were finalized. The 
criteria historically have included four related to military value, one 
related to return on investment, and three related to community 
impacts. However, the National Defense Authorization Act of 
2002[Footnote 7] required DOD to give priority to the criteria dealing 
with military value for the 2005 BRAC round.

While DOD has closed or realigned bases as recommended by the various 
BRAC Commissions, other actions, such as the cleanup of environmentally 
contaminated property and the subsequent transfer of unneeded property 
to other users, have extended beyond the 6-year implementation period 
for each round. Once DOD no longer needs BRAC property, the property is 
considered excess and is offered to other federal agencies. As shown in 
figure 1, any property that is not taken by other federal agencies is 
then considered surplus and is disposed of through a variety of means 
to state and local governments, local redevelopment 
authorities,[Footnote 8] or private parties.

Figure 1: DOD's Usual Procedures for Transferring Property:

[See PDF for image]

[End of figure]

The various methods noted in figure 1 to convey unneeded property to 
parties external to the U.S. government are targeted, in many cases, to 
a particular end use for the property. For example, under a public 
benefit conveyance, state and local governments and local redevelopment 
authorities acquire surplus DOD property for such purposes as schools, 
parks, and airports for little or no cost. Under an economic 
development conveyance, property is transferred for uses that promote 
economic recovery and job creation. Conservation conveyances, which 
were introduced in the Bob Stump National Defense Authorization Act for 
Fiscal Year 2003,[Footnote 9] provide for the transfer of property to a 
state or political subdivision of a state or qualified not-for-profit 
groups for natural resource and conservation purposes. Property can, in 
other cases, also be conveyed to nonfederal parties through the other 
cited methods as shown in figure 1 without regard, in many cases, to a 
particular end use. For example, property can be sold or special 
congressional legislation can dictate transfer to a particular entity.

The National Defense Authorization Act for Fiscal Year 2002[Footnote 
10] extended the authority of the Defense Base Closure and Realignment 
Act of 1990, with some modifications, to authorize an additional BRAC 
round in 2005. The 2002 legislation also required the Secretary of 
Defense to publish in the Federal Register the selection criteria 
proposed for use in the BRAC 2005 round and to provide an opportunity 
for public comment. The proposed selection criteria were published on 
December 23, 2003, with a public comment period ending January 30, 
2004. The final criteria were published on February 12, 2004. The 
criteria for the 2005 BRAC round continue the tradition of having four 
criteria related to military value that are to be given priority 
consideration, and four others that require consideration. As discussed 
more fully later in this statement, while the eight criteria 
essentially follow a framework similar to that employed in previous 
BRAC rounds, greater specificity was added to selected criterion as 
mandated by Congress for the 2005 round.

Status of Prior BRAC Recommendations:

Following the adoption of the previous BRAC recommendations, DOD 
declared 504,000 acres of property as unneeded and available for 
transfer to other federal or nonfederal entities. As of September 30, 
2004, DOD had transferred about 72 percent of that property while 28 
percent had not been transferred, due primarily to the need for 
environmental cleanup. According to DOD data, the BRAC recommendations 
have generated substantial savings--an estimated $29 billion in savings 
or cost avoidances through fiscal year 2003, with expectations of an 
additional $7 billion in annual net recurring savings thereafter. 
Finally, while BRAC can have a traumatic short-term effect on 
communities in the vicinity of closing or realigning bases, most nearby 
communities continue to recover from BRAC actions. Our analysis of key 
economic indicators shows that most communities are generally faring 
well in terms of national averages for unemployment and income growth 
rates.

Implementation of Previous Recommendations and Status of Property 
Transfers:

DOD reported that as of September 30, 2001, it had taken all required 
actions to implement the recommendations of the BRAC Commissions for 
the four rounds.[Footnote 11] Currently, of the approximately 504,000 
unneeded acres available for disposal external to DOD, 72 percent have 
been transferred either to other federal or nonfederal entities, while 
28 percent, including leased acreage, remain in DOD's inventory. A 
breakdown of the current status of unneeded BRAC property shows that as 
of September 30, 2004 (1) 52 percent had been transferred to nonfederal 
entities, (2) 20 percent had been transferred to other federal 
agencies, (3) 18 percent had been leased but not transferred, and (4) 
10 percent was untransferred and is awaiting future disposition (see 
fig. 2).

Figure 2: Disposition of Unneeded BRAC Acreage:

[See PDF for image]

Note: As part of the BRAC process, DOD retained an additional 343,000 
acres at the time closing and realigning its unneeded bases as needed 
for reserve component use. Most of this property was converted from 
active component management to the reserve component and is located at 
several Army bases, including Fort Hunter Liggett, California; Fort 
Chaffee, Arkansas; Fort Pickett, Virginia; Fort Dix, New Jersey; and 
Fort McClellan, Alabama.

[End of figure]

Even though DOD has 140,000 acres of its BRAC property remaining to be 
transferred, much of this land is in long-term lease with other users. 
Altogether, the services have nearly 91,000 acres (65 percent) of their 
untransferred property under lease, leaving 49,000 acres (35 percent) 
that has not been transferred and is not in reuse. The department 
expects that this property will eventually be transferred to nonfederal 
users. Leased property, while not transferred to the user, can afford 
the user and DOD some benefits. Communities, for example, can opt for 
leasing while awaiting final environmental cleanup as an interim 
measure to promote property reuse and job creation. By adding leased 
acres to the number of transferred acres, the amount of unneeded BRAC 
property that is in reuse rises to 90 percent.

What may be different for this BRAC round is that Congress, in 
authorizing the 2005 BRAC round, gave renewed emphasis to seeking fair 
market value in disposing of BRAC property[Footnote 12] and we have 
seen evidence of this in recent land sales by the Navy for some 
remaining property disposals from prior BRAC rounds. It is too soon for 
us to know to what extent land sales will occur in implementing results 
of the 2005 round in comparison with other forms of property disposal 
such as no-cost economic development conveyances, or transfers to other 
federal agencies. While this is not an issue that bears directly on the 
Commission's task of assessing the Secretary's recommendations, it 
could be an issue that will arise in your contacts with communities as 
you complete your task.

While DOD has closed or realigned bases as recommended by the various 
BRAC Commissions, other actions, such as the cleanup of environmentally 
contaminated property and the subsequent transfer of unneeded property 
to other users, continue beyond the 6-year implementation period for 
each round. As we have reported in the past, environmental cleanup 
constraints have delayed the military services from rapidly 
transferring unneeded BRAC property. Army data show that about 82 
percent of the Army's approximately 101,000 untransferred acres have 
some kind of environmental impediment, such as unexploded ordnance 
(UXO)[Footnote 13] or some level of chemical contamination that 
requires cleanup before transfer can take place. Navy data show that 
about 65 percent of the Navy's almost 13,000 untransferred acres could 
not be transferred because of environmental reasons. Likewise, about 98 
percent of the Air Force's approximately 24,000 untransferred acres is 
attributable to environmental cleanup issues. While the Commission is 
likely to be confronted with the issue of environmental cleanup in 
examining the Secretary's recommendations, complete information is not 
always fully available during the time frame for the Commission's work 
since cleanup costs are affected by yet-to-be-developed reuse plans.

Net Savings Estimates for the Prior BRAC Rounds Remain Substantial:

Our analysis of DOD data shows that the department had accrued an 
estimated $29 billion in net savings or cost avoidances through fiscal 
year 2003 for the four previous BRAC rounds.[Footnote 14] In 
calculating net savings, DOD deducts the costs of implementing BRAC 
actions for the four closure rounds from the estimated savings. As 
figure 3 shows, the cumulative estimated savings surpassed the 
cumulative costs to implement BRAC actions in 1998, and the net savings 
have grown and will continue to grow from that point, even though some 
costs (e.g., environmental cleanup) have been incurred after that time 
and some costs will continue for a number of years until cleanup or 
required monitoring is completed.

Figure 3: Cumulative BRAC Cost and Savings Estimates for the Previous 
Rounds through Fiscal Year 2003:

[See PDF for image]

[End of figure]

Our analysis shows that the rate of net savings accumulation has 
increased over time because the cumulative BRAC costs flattened out 
just before the 6-year implementation period for the last round ending 
in fiscal year 2001.

Most expenses associated with closures and realignments were incurred 
through fiscal year 2001; most of the expenses beyond fiscal year 2001 
were primarily incurred for environmental cleanup. Through fiscal year 
2003, the cumulative costs to implement the four previous round actions 
amounted to about $23.3 billion. As shown in figure 4, approximately 
one-third ($7.8 billion) of this amount was spent for operations and 
maintenance, such as the maintenance and repair needed to keep 
facilities and equipment in good working order, as well as civilian 
severance and relocation costs. A little more than one-third ($8.3 
billion) was spent on environmental cleanup and compliance activities, 
for example, to reduce, remove, and recycle hazardous wastes and to 
remove unsafe buildings and debris from closed bases. Finally, a little 
less than one-third ($6.7 billion) was used for military construction 
at bases that were not closed, including renovating existing facilities 
and constructing new buildings to accommodate relocating military units 
and various functions.

Figure 4: Costs Incurred for Prior BRAC Rounds through Fiscal Year 2003:

[See PDF for image]

[End of figure]

As figure 5 shows, DOD estimates that it accrued BRAC savings of $52.2 
billion through fiscal year 2003 as a result of eliminating or reducing 
operation and maintenance costs, including base support costs, and 
eliminating or reducing military and civilian personnel costs. Of this 
amount, about half ($26.8 billion) can be attributed to savings from 
operation and maintenance activities, such as terminating or reducing 
physical security, fire protection, utilities, property maintenance, 
accounting, civilian payroll, and a variety of other services that have 
associated costs. An additional $14.7 billion in estimated savings 
resulted from military personnel reductions.

Figure 5: Estimated Savings Breakout for Prior BRAC Rounds through 
Fiscal Year 2003:

[See PDF for image]

[End of figure]

Based on the previous rounds, the Commission should expect that the 
majority of the savings from the 2005 recommendations will result from 
reductions in operation and maintenance and military personnel costs.

Most Affected Communities Are Recovering from Prior BRAC Rounds:

While the short-term impact can be very traumatic, several factors, 
such as the strength of the national, regional, and local economies, 
play a role in determining the long-term economic impact of the base 
realignment or closure process on communities. Our work has shown that 
recovery for some communities remains a challenge, while other 
communities surrounding a base closure are faring better. As DOD last 
reported, as of September 30, 2004, almost 85 percent (110,086) of the 
129,649 DOD civilian jobs lost on military bases as a result of 
realignments or closures in the previous BRAC rounds had been replaced 
at these locations as the properties were redeveloped. I want to 
emphasize that this recovery figure does not include other jobs created 
off the bases. Appendix II gives a detailed listing of jobs lost and 
created at major BRAC locations during the last four rounds. In 
addition, two key economic indicators--the unemployment rate and the 
average annual real per capita income growth rate--show that BRAC 
communities are generally doing well when compared with average U.S. 
rates. Since 1997 (after completion of the implementation periods for 
the first two rounds, in 1988 and 1991) and through the implementation 
periods of the past two rounds (1993 and 1995), about 70 percent of the 
62 BRAC-affected communities have consistently been at or below the 
national unemployment rate. Appendix III provides more information on 
the average unemployment rates and on the average annual real per 
capita income growth rates for 62 communities affected by previous BRAC 
actions.

Our previous reports have pointed out a number of factors that can 
affect economic recovery including the robustness of the national 
economy, diversity of the local economy, and assistance from various 
federal agencies to facilitate recovery efforts. By way of comparison, 
I would note that the national unemployment rate at the time of the 
1995 round was 5.4 percent; today it is 5.2 percent.

We have previously reported that as of September 30, 2004, federal 
agencies reported that they had spent about $1.9 billion for such 
purposes as base reuse planning, airport planning, job training, 
infrastructure improvements, and community economic development. These 
activities include the following:

* About $611 million was provided by the Department of Commerce's 
Economic Development Administration to assist communities with 
infrastructure improvements, building demolition, and revolving fund 
loans.

* About $760 million was provided by the Federal Aviation 
Administration to assist with converting former military airfields to 
civilian use.

* About $223 million was provided by the Department of Labor to help 
communities retrain workers who lost their jobs.

* About $280 million was provided by DOD's Office of Economic 
Adjustment to help communities plan and implement the reuse of BRAC 
bases.

While economic impact is one of the selection criteria used in BRAC 
decision making, few bases were eliminated from closure or realignment 
consideration in previous rounds because of potential economic impact. 
Having said that, I would point out that while, from an economic impact 
standpoint, BRAC is most known for the losses suffered by communities, 
some communities gained missions and personnel as the result of BRAC 
decisions. The 2005 BRAC round could potentially have a greater impact 
on gaining communities than in past rounds since this round is expected 
to be used to inform decisions on placement of units and thousands of 
personnel returning from overseas in implementing the results of the 
department's separate overseas basing study. Also, there are major 
force structure changes underway in the Army with the creation of new 
units of action which expand on existing brigade sizes. Each of these 
could impact community infrastructure in many areas such as housing and 
schools. However, we will not have a clear indication of any such 
expanded impacts until the Secretary's BRAC recommendations are made 
public in a few days.

DOD's Expectations for BRAC 2005:

DOD recognized at the time it was completing its recommendations for 
the 1995 BRAC round that excess infrastructure would remain and that 
additional closures and realignments would be needed in the future. The 
BRAC 2005 round continues the goal of previous rounds of reducing 
excess infrastructure within the department and achieving savings that 
could be applied to other priorities. However, DOD expanded the focus 
of BRAC 2005 to include transformation issues, to accommodate 
restationing of forces from overseas, and to improve jointness efforts 
among the military services.

In a memorandum dated November 15, 2002, the Secretary of Defense 
issued initial guidance outlining goals for the 2005 BRAC round. He 
noted that, at a minimum, BRAC 2005 must eliminate excess physical 
capacity--the operation, sustainment, and recapitalization of which 
diverts scarce resources from defense capability. At the same time, the 
Secretary's guidance depicted the round as focusing on more than simply 
reducing excess capacity. He stated that the round could make an even 
more profound contribution to transforming the department by 
rationalizing its infrastructure and defense strategy. He further noted 
that another primary objective of the round was to examine 
opportunities for greater joint activity.

While the broader goals of BRAC 2005 have increased traditional 
interest in the potential outcome of this BRAC round, great public 
attention has been devoted to the issue of excess capacity and how many 
bases are likely to be closed in this round. While we await the 
Secretary's announcement of proposed closures and realignments in a few 
days, the Commission may want to review an earlier assessment of excess 
infrastructure capacity that DOD was required to complete in advance of 
the BRAC round which has led to much public speculation about what 
could result from this round. The result of that analysis was included 
in a 2004 report to Congress in justifying the need for the 2005 BRAC 
round. Although that report did give indications of excess capacity, 
our work shows the analysis on which it was based did not provide a 
well-grounded assessment of total excess capacity across DOD or the 
potential for achieving greater efficiencies in use of that capacity. 
It also led to much speculation on the number of bases likely to be 
closed in this BRAC round.

DOD's analysis of its infrastructure capacity for the 2004 report, 
which was completed outside the 2005 BRAC process, indicates the 
presence of excess capacity across certain functional areas through 
fiscal year 2009. However, the limitations of the methodology used for 
that analysis, such as use of varying capacity metrics among the 
military services for similar type facilities, prevented it from giving 
a precise indication of excess capacity across all classes of 
facilities. This raises questions about the appropriateness of its use 
to project a total amount of excess capacity across DOD. Furthermore, 
DOD's methodology did not analyze facilities or functions on a joint or 
cross-service basis to determine any additional excess capacity, but 
such a cross-service analysis is a priority for the 2005 round. 
Moreover, it did not fully consider the impact of force structure 
changes underway and the planned restationing of thousands of forces 
from overseas bases. Based on this, it is problematic for anyone to try 
to add up these diverse measures and point to a single cumulative 
figure of excess capacity. Even more problematic are efforts to 
translate this figure to a set percentage of bases that are likely to 
be closed.

While previous BRAC rounds have focused primarily on reducing excess 
capacity, DOD officials have stated that in addition to that goal, the 
2005 BRAC round aims to further transform the military by correlating 
base infrastructure to the force structure, and enhancing joint 
capabilities by improving joint utilization. That approach takes you 
past the point of simply focusing efforts on reducing excess 
infrastructure and generating savings. As a result, we must await the 
results of the Secretary of Defense's closure and realignment 
recommendations to see how the extent of capacity reduction proposed in 
this round compares to that in prior rounds. If you are looking for 
indicators of capacity reduction in BRAC 2005, the Commission may want 
to focus on such measures as net reduction in plant replacement value 
or square footage of space. While these are not all-inclusive 
indicators, they should give you some sense of the potential impact of 
the 2005 round.

2005 BRAC Analytical Framework Builds on Historic Structure:

The framework used in the 2005 BRAC round continues the historical 
framework used in previous rounds. The Defense Base Closure and 
Realignment Act of 1990 led to the creation of what has become a 
structured process for making BRAC recommendations and one that gives 
the public insight into the basis for recommendations made by the 
Secretary of Defense. Selection criteria for the 2005 BRAC round 
preserve a framework similar to that used in earlier BRAC rounds, with 
specificity added in several areas that pertain to military value. In 
addition, the framework for the 2005 round is expected to incorporate 
several lessons learned from the previous rounds, related to 
privatization in place, total cost to the government, reserve enclaves, 
and cross-service issues.

Requirements to Ensure Fairness of BRAC Process:

Closing unneeded defense facilities has historically been difficult 
because of public concern about the economic effects of closures on 
communities and the perceived lack of impartiality in the decision-
making process. A variety of requirements or procedures have been 
either mandated by the 1990 act, as amended, or adopted by DOD over 
time to ensure the fairness and objectivity of the base closing 
process. Some of these requirements or procedures include:

* All installations must be compared equally against selection criteria 
and a current force structure plan must be developed by the Secretary 
of Defense.

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

* Selection criteria for identifying candidates for closure and 
realignment must be made available for public comment before being 
finalized.

* 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.

* Information submitted for use by the Secretary of Defense or the 
Commission in the BRAC decision-making process must be certified--that 
is, certified as 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.

* An independent commission is required to review DOD's proposed 
closures and realignments and to finalize a list of proposed closures 
and realignments to be presented to the President for his review and 
subsequent submission to Congress.

* The BRAC Commission is required to hold public hearings.

* The BRAC process imposes specific time frames for completing specific 
portions of the process.

* The President and Congress are required to accept or reject the 
Commission's recommendations in their entirety.

* In addition to GAO's legislatively mandated role in reporting on the 
BRAC process, the military service audit agencies and DOD Inspector 
General personnel are 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.

An important tool used in the BRAC process for analyzing estimates of 
costs and savings for potential recommendations is the Cost of Base 
Realignment Actions (COBRA) model. This model has been used in the base 
closure process since 1988, with improvements made to the model in the 
intervening years. We noted in 1995 that two of the more significant 
actions affecting BRAC 1995 were the validation of the COBRA model by 
the Army Audit Agency and a greater emphasis on using standard cost 
factors. Refinements to the model historically have been initiated and 
controlled by a COBRA Joint Process Action Team. We will be reporting 
on recent efforts to update the model in our upcoming report on the 
BRAC 2005 process.

In the interim, it is important to distinguish between the use of the 
COBRA model for evaluating alternative closure and realignment 
scenarios and use of other efforts to produce more refined cost and 
budget data for implementing BRAC decisions. Differences between COBRA 
and budget quality data used in implementing BRAC decisions include the 
following. First, COBRA estimates, particularly those based on standard 
cost factors, are averages, which are later refined for budget 
purposes. Further, COBRA costs are expressed in constant-year dollars; 
budgets are expressed in then-year (inflated) dollars.

Our work in examining lessons learned from previous BRAC rounds found 
general agreement that the previous legislation and the framework it 
established served the process well, and general agreement that this 
framework would be useful for a future round.[Footnote 15] That is not 
to say that the previous process was perfect or entirely devoid of 
concerns over the role of politics in the process. As we have 
previously noted, we recognize that no public policy process, 
especially none as open as BRAC, can be completely removed from the 
U.S. political system. However, the elements of the process noted above 
provide several checks and balances to hold political influences at a 
minimum. That said, the success of these provisions requires that all 
participants of the process adhere to the rules and procedures.

Selection Criteria for 2005 Round Continue Sound Framework Used in 
Prior Rounds:

The department's final selection criteria for the 2005 BRAC round 
essentially follow a framework similar to that employed in previous 
BRAC rounds, with specificity added in selected areas in response to 
requirements mandated by Congress. The 2002 legislation authorizing the 
2005 BRAC round required that DOD give priority to military value and 
consider (1) the impact on joint warfighting, training, and readiness; 
(2) the availability and condition of training areas suitable for 
maneuver by ground, naval, or air forces throughout diverse climates 
and terrains, and staging areas for use by the armed forces in homeland 
defense missions; and (3) the ability to accommodate contingency, 
mobilization, and future force requirements. The legislation also 
required DOD to give consideration to other factors, many of which 
replicated criteria used in previous BRAC rounds. Further, the 
legislation required DOD to consider cost impacts to other federal 
entities as well as to DOD in its BRAC decision making. Additionally, 
the National Defense Authorization Act for Fiscal Year 2004[Footnote 
16] required DOD to consider surge requirements in the 2005 BRAC 
process. Table 1 compares the 1995 BRAC criteria with those adopted for 
2005, with changes highlighted in bold.

Table 1: BRAC Criteria from 1995 and Those Adopted for 2005:

Criteria for 1995 round: 

Military value: 

1. The current and future mission requirements and the impact on 
operational readiness of DODís total force. 
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 investment: 
5. The extent and timing of potential costs and savings, including the 
number of years, beginning with the date of completion of the closure 
or realignment, for the savings to exceed the costs. 

Community impacts: 
6. The economic impact on communities. 
7. The ability of both the existing and potential receiving 
communitiesí infrastructures to support forces, missions, and 
personnel. 
8. The environmental impact

Criteria for 2005 round: 
Military value: 
1. The current and future mission capabilities and the impact on 
operational readiness of the Defense Departmentís total force, 
including the impact on joint warfighting, training, and readiness. 
2. The availability and condition of land, facilities, and associated 
airspaceóincluding training areas suitable for maneuver by ground, 
naval, or air forces throughout diversity of climate and terrain areas 
and staging areas for the use of the Armed Forces in homeland defense 
missionsóat both existing and potential receiving locations. 
3. The ability to accommodate contingency, mobilization, surge, and 
future total force requirements at both existing and potential 
receiving locations to support operations and training. 
4. The cost of operations and the manpower implications. 

Other considerations: 
5. The extent and timing of potential costs and savings, including the 
number of years, beginning with the date of completion of the closure 
or realignment, for the savings to exceed the costs. 
6. The economic impact on existing communities in the vicinity of 
military installations. 
7. The ability of both the existing and potential receiving 
communitiesí infrastructure to support forces, missions, and personnel. 
8. The environmental impact, including the impact of costs related to 
potential environmental restoration, waste management, and 
environmental compliance activities.

Source: GAO based on information from DOD and legislation (emphasis 
bolding added by GAO to denote changes from 1995).

[End of table]

I want to note that the National Defense Authorization Act for Fiscal 
Year 2005 codified these criteria in its entirety.[Footnote 17]

Our analysis of lessons learned from previous BRAC rounds affirmed the 
soundness of these basic criteria and generally endorsed their 
retention for the future, while recognizing the potential for improving 
the process by which the criteria are used in decision making.[Footnote 
18] Adoption of these criteria adds to the approach an element of 
consistency and continuity with those of the past three BRAC rounds.

Apart from changes to DOD's criteria required by legislation, DOD 
received a variety of comments on the draft criteria once they were 
published for comment in the Federal Register in December 2003, but did 
not make any changes before issuing the final criteria in February 
2004. Most of these comments were on the four military value criteria 
and centered on the maintenance of adequate surge capacity; the roles 
military installations fulfill in homeland defense missions; the unique 
features of research, development, test, and evaluation facilities; and 
the preservation of vital human capital in various support functions. 
In responding to those comments, DOD expressed the view that the draft 
criteria adequately addressed these issues and DOD did not see the need 
to make any changes to its draft criteria. For example, DOD said that 
surge requirements will be addressed under criterion one, which 
requires the department to consider "current and future mission 
capabilities," and criterion three, which requires DOD to consider an 
installation's ability to "accommodate contingency, mobilization, and 
future total force requirements" to support operations and training.

Collectively, in our view, many of the public comments on DOD's 
criteria expressed concern that the criteria for the 2005 BRAC round 
focused more on assessing military value based on military missions and 
operational capabilities without recognizing important support 
capabilities such as research, development, test, and evaluation. 
Although modifications to the criteria might have been made to address 
some of these concerns, the absence of such changes did not indicate 
that these issues would not be considered in applying the criteria 
during the BRAC process. For example, the department has established a 
variety of joint cross-service groups[Footnote 19] to analyze various 
support functions during the upcoming round and each group has had to 
adapt the selection criteria to assess military value related to each 
functional area. Historically, in assessing military value DOD 
components typically identify multiple attributes, facets, or 
evaluative components related to each military value criteria, then 
identify a number of qualitative metrics and numerous questions to 
collect data to support the overall military value analysis. Our July 
report on the 2005 process will highlight the use of military value 
criteria by each service and cross-service group.

Lessons Learned from Previous Rounds Have Implications for 2005 BRAC 
Round:

Our prior work has identified several lessons learned from the conduct 
of the prior BRAC rounds that we believe you should be aware of in 
reviewing DOD's proposed closure and realignment recommendations for 
the 2005 round and finalizing your decisions on the merits of those 
recommendations. These lessons learned relate directly to the 
development of individual recommendations and include issues related to 
(1) the privatization-in-place of specific DOD facilities; (2) the 
consideration of total costs to the government in implementing specific 
recommendations; (3) the retention of property and facilities, 
typically referred to as enclaves, on closing bases; and (4) the 
consideration of cross-servicing in fostering jointness in the decision-
making process.

Privatization-in-place:

The 1993 and 1995 BRAC rounds were notable for a few recommendations 
that resulted in functions being privatized-in-place rather than being 
closed with the work moved to another location. In December 
1999,[Footnote 20] we reported that privatization-in-place had not 
optimized reductions in excess capacity in DOD's infrastructure, but 
that it can allow for some cost savings in the overall public-private 
defense infrastructure. Rather than closing facilities to reduce excess 
capacity, privatization-in-place enables the workload to remain at 
those sites. As a result, DOD continues to support costs associated 
with maintaining that facility infrastructure through rates charged by 
the contractors for the work performed. We concluded that privatization-
in-place would only be a more cost-effective alternative if contractors 
can achieve savings that are significant enough to offset the savings 
lost by not relocating workloads to DOD's underutilized facilities. In 
enacting authority for the 2005 BRAC round, Congress stipulated that 
privatization-in-place can occur only if it is specified in the 
Commission recommendations and determined by the Commission to be the 
most cost-effective method of implementing the recommendation.[Footnote 
21] I am not in a position today to say to what extent this will be a 
factor in the 2005 round, but I did want to bring this to your 
attention in case it does become an issue during your deliberations.

Total cost to the government:

Our report on the 1995 BRAC process noted that although the proposed 
closure of one Air Force base would decrease the Air Force's overhead, 
it could result in an increase in operational costs to the Department 
of Energy. We reiterated a concern we had made in an earlier BRAC round 
that some DOD BRAC decisions excluded consideration of costs that may 
be incurred by other federal agencies, and we recommended that DOD at 
least disclose such costs. In enacting authority for the 2005 BRAC 
round, Congress stipulated that the selection criteria related to cost 
or savings of proposed closures would have to take into account the 
effect of the proposed action on the costs of any other DOD activity or 
any other federal agency.[Footnote 22] I am not in a position today to 
say to what extent this may be an issue in the 2005 BRAC round but did 
want to bring it to your attention for its potential consideration.

Reserve enclaves:

The four previous BRAC Commissions recommended 27 actions in which 
either a reserve enclave or similar reserve presence was to be formed 
at a base that was to be closed or realigned. In June 2003,[Footnote 
23] we reported that the specific infrastructure needed for many 
reserve enclaves was generally not identified until after the base 
closure and realignment commission for a closure round had rendered its 
recommendations. According to Army officials, while the Army had 
generally decided it wanted to retain much of the available training 
land for its enclaves prior to completion of commission decision making 
during the 1995 round, time constraints precluded the Army from fully 
identifying the specific training acreages and facilities needed until 
after the commission made its recommendations. Consequently, while some 
of the commission's recommendation language[Footnote 24] for the 1995 
closure round suggested that many Army reserve enclaves would retain 
minimum essential facilities, the language was nevertheless 
sufficiently general to allow the Army wide flexibility in creating 
such enclaves. Subsequently, several enclaves were created by the Army 
that were nearly as large as the closing bases on which they were 
located. In contrast, the infrastructure needed for Air Force enclaves 
was more clearly defined during the decision-making process and 
subsequent commission recommendations were more specific than those 
provided for the Army. Table 2 provides a comparison of the reported 
size and number of facilities of pre-BRAC bases with those of post-BRAC 
enclaves for DOD's 10 major enclaves.

Table 2: DOD Pre-BRAC and Post-BRAC Base Acreage and Facilities for 
Bases Where Major Reserve Enclaves Were Created:

Service: Army; 
Base: Fort Hunter Liggett; 
Number of acres: Pre-BRAC: 164,762; 
Number of acres: Post-BRAC: 164,272; 
Number of acres: Percent retained: 100%; 
Square footage of facilities: Pre-BRAC: 836,420; 
Square footage of facilities: Post-BRAC: 832,906; 
Square footage of facilities: Percent retained: 100%.

Service: Army; 
Base: Fort Chaffee; 
Number of acres: Pre-BRAC: 71,381; 
Number of acres: Post-BRAC: 64,272; 
Number of acres: Percent retained: 90%;
Square footage of facilities: Pre-BRAC: 4,839,241; 
Square footage of facilities: Post-BRAC: 1,695,132; 
Square footage of facilities: Percent retained: 35%.

Service: Army; 
Base: Fort Pickett; 
Number of acres: Pre-BRAC: 45,145; 
Number of acres: Post-BRAC: 42,273; 
Number of acres: Percent retained: 94%;
Square footage of facilities: Pre-BRAC: 3,103,000; 
Square footage of facilities: Post-BRAC: 1,642,066; 
Square footage of facilities: Percent retained: 53%.

Service: Army; 
Base: Fort Dix; 
Number of acres: Pre-BRAC: 30,997; 
Number of acres: Post-BRAC: 30,944; 
Number of acres: Percent retained: 100%;
Square footage of facilities: Pre-BRAC: 8,645,293; 
Square footage of facilities: Post-BRAC: 7,246,964; 
Square footage of facilities: Percent retained: 84%.

Service: Army; 
Base: Fort Indiantown Gap; 
Number of acres: Pre-BRAC: 17,797; 
Number of acres: Post-BRAC: 17,227; 
Number of acres: Percent retained: 97%;
Square footage of facilities: Pre-BRAC: 4,388,000; 
Square footage of facilities: Post-BRAC: 1,565,726; 
Square footage of facilities: Percent retained: 36%.

Service: Army; 
Base: Fort McClellan; 
Number of acres: Pre-BRAC: 41,174; 
Number of acres: Post-BRAC: 22,531; 
Number of acres: Percent retained: 55%;
Square footage of facilities: Pre-BRAC: 6,560,687; 
Square footage of facilities: Post-BRAC: 873,852; 
Square footage of facilities: Percent retained: 13%.

Service: Army; 
Base: Air Force: Fort Devens; 
Number of acres: Pre-BRAC: 9,930; 
Number of acres: Post-BRAC: 5,226; 
Number of acres: Percent retained: 53%; 
Square footage of facilities: Pre-BRAC: 5,610,530; 
Square footage of facilities: Post-BRAC: 1,537,174; 
Square footage of facilities: Percent retained: 27%.

Service: Air Force; 
Base: March Air Force Base; 
Number of acres: Pre-BRAC: 6,606; 
Number of acres: Post-BRAC: 2,359; 
Number of acres: Percent retained: 36%; 
Square footage of facilities: Pre-BRAC: 3,184,321; 
Square footage of facilities: Post-BRAC: 2,538,742; 
Square footage of facilities: Percent retained: 80%.

Service: Air Force; 
Base: Grissom Air Force Base; 
Number of acres: Pre-BRAC: 2,722; 
Number of acres: Post-BRAC: 1,380; 
Number of acres: Percent retained: 51%;
Square footage of facilities: Pre-BRAC: 3,910,171; 
Square footage of facilities: Post-BRAC: 1,023,176; 
Square footage of facilities: Percent retained: 26%.

Service: Air Force; 
Base: Homestead Air Force Base; 
Number of acres: Pre-BRAC: Total: 2,916; 
Number of acres: Post-BRAC: Total: 852; 
Number of acres: Percent retained: Total: 29%; 
Square footage of facilities: Pre-BRAC: Total: 5,373,132; 
Square footage of facilities: Post-BRAC: Total: 867,341; 
Square footage of facilities: Percent retained: Total: 16%.

Total; 
Number of acres: Pre-BRAC: 394,430; 
Number of acres: Post-BRAC: 351,386; 
Number of acres: Percent retained: 89%; 
Square footage of facilities: Pre-BRAC: 46,450,795; 
Square footage of facilities: Post-BRAC: 19,823,079; 
Square footage of facilities: Percent retained: 43%.

Source: DOD.

Note: "Major" reserve enclaves refer to those enclaves with more than 
500 acres. "Pre-BRAC" refers to base data at the time of the BRAC 
Commission recommendation while "Post-BRAC" refers to enclave data as 
of the end of fiscal year 2002. Percentages are rounded to nearest 
whole number.

[End of table]

We also reported that the Army did not include estimated costs to 
operate and maintain most of its major reserve enclaves in deriving net 
estimated base savings during the decision-making process. Our analysis 
as well as that of the Army Audit Agency[Footnote 25] showed that the 
omission of these costs had a significant impact on the estimated 
savings and payback periods[Footnote 26]--important considerations in 
the realignment and closure decision-making process--for several of 
these bases. In particular, the estimated savings were overstated and 
the estimated payback periods were understated for those specific 
bases. DOD concurred with our recommendation that in BRAC 2005 it 
should ensure that data provided to the BRAC Commission clearly specify 
the (1) infrastructure (e.g., acreage and total square footage of 
facilities) needed for any proposed reserve enclaves and (2) estimated 
costs to operate and maintain such enclaves. To the extent that DOD 
proposes the creation of enclaves in the 2005 round, the Commission may 
want to ensure that both infrastructure requirements and costs to 
operate and maintain the enclaves are clearly identified and factored 
in relevant BRAC recommendations.

Cross-service issues:

While previous BRAC rounds were generally effective in dealing with 
basing decisions within individual services and defense agencies, they 
did not provide an adequate forum for resolving cross-service issues. 
While some cross-service emphasis occurred in the 1993 and 1995 BRAC 
rounds, their contributions were essentially marginalized by a process 
that was largely driven by the individual military services. Our 
previous lessons learned report[Footnote 27] noted that parochial 
interests and disagreements among the services over evaluations of 
their facilities served as barriers to achieving significant cross-
service agreements in 1993 and 1995. As a result, the department missed 
opportunities to reduce its infrastructure in various support-
functional areas.

A primary objective of BRAC 2005 is to examine and implement 
opportunities for greater joint activity. Based on lessons learned from 
previous efforts to analyze jointness, the Secretary of Defense has 
established seven joint cross-service groups[Footnote 28] to analyze 
common business-oriented support functions. Each group is chaired by a 
senior member of the department and includes representatives from each 
service. The joint cross-service groups were empowered to make 
recommendations directly to the Infrastructure Steering Committee, the 
group established by the Secretary of Defense to oversee the analyses 
of the joint cross-service groups and ensure integration of that 
process with the military departments. This suggests the potential for 
these cross-service groups to have a stronger role in the 2005 BRAC 
process than they had in the past.

In conclusion, we have completed much work to date in monitoring DOD's 
decision-making process but much work remains to finalize our review 
and issue our report by the mandated July 1 time frame. From a front-
end perspective, we have gained much insight observing the military 
services and cross-service teams developing and implementing their 
plans for completing their analyses, and identifying and analyzing 
potential closure and realignment scenarios. However, we still have 
much work to do before finalizing and issuing our report to meet our 
congressionally mandated reporting time frame. In the time remaining, 
as DOD's candidate recommendations are finalized, we will be looking 
back through the process examining the collection of recommendations 
against the framework of DOD's selection criteria, its objectives for 
the round, and with a special emphasis on cost and savings. I look 
forward to discussing the results of our work with you and your staff 
once our work is completed. This concludes my statement. I would be 
pleased to answer any questions you or other Members of the Commission 
may have at this time.

Contacts and Acknowledgments:

For further information regarding this statement, please contact Barry 
W. Holman at (202) 512-5581. Individuals making key contributions to 
this statement include Michael Kennedy, James Reifsnyder, Tom Mahalek, 
Alissa Czyz, and Cheryl Weissman.

[End of section]

Appendix I: Key Previous GAO Reports on DOD's Base Realignments and 
Closures:

Military Base Closures: Updated Status of Prior Base Realignment and 
Closures. 
[Hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-05-138] 
Washington, D.C.: January 13, 2005.

Military Base Closures: Assessment of DOD's 2004 Report on the Need for 
a Base Realignment and Closure Round. 
[Hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-04-760]
Washington, D.C.: May 17, 2004.

Military Base Closures: Observations on Preparations for the Upcoming 
Base Realignment and Closure Round. 
[Hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-04-558T]
Washington, D.C.: March 25, 2004.

Military Base Closures: Better Planning Needed for Future Reserve 
Enclaves. 
[Hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-03-723]
Washington, D.C.: June 27, 2003.

Military Base Closures: Progress in Completing Actions from Prior 
Realignments and Closures. 
[Hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-02-433]
Washington, D.C.: April 5, 2002.

Military Base Closures: DOD's Updated Net Savings Estimate Remains 
Substantial. 
[Hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-01-971]
Washington, D.C.: July 31, 2001.

Military Bases: Status of Prior Base Realignment and Closure Rounds. 
[Hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO/NSIAD-99-36] 
Washington, D.C.: December 11, 1998.

Military Bases: Review of DOD's 1998 Report on Base Realignment and 
Closure. 
[Hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO/NSIAD-99-17] 
Washington, D.C.: November 13, 1998.

Military Bases: Lessons Learned from Prior Base Closure Rounds. 
[Hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO/NSIAD-97-151] 
Washington, D.C.: July 25, 1997.

Military Bases: Closure and Realignments Savings Are Significant, but 
Not Easily Quantified. 
[Hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO/NSIAD-96-67] 
Washington, D.C.: April 8, 1996.

Military Bases: Analysis of DOD's 1995 Process and Recommendations for 
Closure and Realignment. 
[Hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO/NSIAD-95-133] 
Washington, D.C.: April 14, 1995.

Military Bases: Analysis of DOD's Recommendations and Selection Process 
for Closures and Realignments. 
[Hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO/NSIAD-93-173] 
Washington, D.C.: April 15, 1993.

Military Bases: Observations on the Analyses Supporting Proposed 
Closures and Realignments. 
[Hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO/NSIAD-91-224] 
Washington, D.C.: May 15, 1991.

Military Bases: An Analysis of the Commission's Realignment and Closure 
Recommendations. 
[Hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO/NSIAD-90-42] 
Washington, D.C.: November 29, 1989.

[End of section]

Appendix II: Civilian Jobs Lost and Created at Major BRAC Locations 
Affected by the Previous Four Rounds:

The closure or realignment of military bases creates job losses at 
these facilities, but subsequent redevelopment of the former bases' 
property provides opportunities for creating new jobs. The data 
presented in table 3 include civilian jobs lost and created at major 
base realignments and closures during the previous four BRAC rounds, as 
of September 30, 2004. The data do not include the job losses that may 
have occurred elsewhere in a community, nor do they capture jobs 
created from other economic activity in the area.

Table 3: Civilian Jobs Lost and Created at Major Locations Affected by 
Four Previous BRAC Rounds (as of September 30, 2004):

Major base: Alameda Naval Air Station and Naval Aviation Depot, Calif; 
BRAC round: 1993; 
Estimated jobs lost: 3,228; 
Estimated jobs created: 1,448; 
Recovery (percent): 45%.

Major base: Barbers Point Naval Air Station, Hawaii; 
BRAC round: 1993; 
Estimated jobs lost: 618; 
Estimated jobs created: 100; 
Recovery (percent): 16%.

Major base: Bayonne Military Ocean Terminal, N.J; 
BRAC round: 1995; 
Estimated jobs lost: 2,015; 
Estimated jobs created: 995; 
Recovery (percent): 49%.

Major base: Bergstrom Air Force Base, Tex; 
BRAC round: 1991; 
Estimated jobs lost: 927; 
Estimated jobs created: 4,359; 
Recovery (percent): 470%.

Major base: Carswell Air Force Base, Tex; 
BRAC round: 1991; 
Estimated jobs lost: 869; 
Estimated jobs created: 271; 
Recovery (percent): 31%.

Major base: Castle Air Force Base, Calif; 
BRAC round: 1991; 
Estimated jobs lost: 1,149; 
Estimated jobs created: 2,326; 
Recovery (percent): 202%.

Major base: Cecil Field Naval Air Station, Fla; 
BRAC round: 1993; 
Estimated jobs lost: 995; 
Estimated jobs created: 1,615; 
Recovery (percent): 162%.

Major base: Chanute Air Force Base, Ill; 
BRAC round: 1988; 
Estimated jobs lost: 1,035; 
Estimated jobs created: 1,869; 
Recovery (percent): 181%.

Major base: Charleston Naval Complex, S.C; 
BRAC round: 1993; 
Estimated jobs lost: 6,272; 
Estimated jobs created: 2,797; 
Recovery (percent): 45%.

Major base: Chase Field Naval Air Station, Tex; 
BRAC round: 1991; 
Estimated jobs lost: 956; 
Estimated jobs created: 1,018; 
Recovery (percent): 106%.

Major base: Eaker Air Force Base, Ark; 
BRAC round: 1991; 
Estimated jobs lost: 777; 
Estimated jobs created: 509; 
Recovery (percent): 66%.

Major base: El Toro Marine Corps Air Station, Calif; 
BRAC round: 1993; 
Estimated jobs lost: 979; 
Estimated jobs created: 123; 
Recovery (percent): 13%.

Major base: England Air Force Base, La; 
BRAC round: 1991; 
Estimated jobs lost: 682; 
Estimated jobs created: 1,963; 
Recovery (percent): 288%.

Major base: Fitzsimmons Army Medical Center, Colo; 
BRAC round: 1995; 
Estimated jobs lost: 1,612; 
Estimated jobs created: 1,116; 
Recovery (percent): 69%.

Major base: Fort Benjamin Harrison, Ind; 
BRAC round: 1991; 
Estimated jobs lost: 1,050; 
Estimated jobs created: 1,171; 
Recovery (percent): 112%.

Major base: Fort Devens, Mass; 
BRAC round: 1991; 
Estimated jobs lost: 2,178; 
Estimated jobs created: 4,180; 
Recovery (percent): 192%.

Major base: Fort McClellan, Ala; 
BRAC round: 1995; 
Estimated jobs lost: 2,156; 
Estimated jobs created: 2,028; 
Recovery (percent): 94%.

Major base: Fort Ord, Calif; 
BRAC round: 1991; 
Estimated jobs lost: 2,835; 
Estimated jobs created: 2,020; 
Recovery (percent): 71%.

Major base: Fort Pickett, Va; 
BRAC round: 1995; 
Estimated jobs lost: 245; 
Estimated jobs created: 272; 
Recovery (percent): 111%.

Major base: Fort Ritchie, Md; 
BRAC round: 1995; 
Estimated jobs lost: 1,373; 
Estimated jobs created: 42; 
Recovery (percent): 3%.

Major base: Fort Sheridan, Ill; 
BRAC round: 1988; 
Estimated jobs lost: 1,681; 
Estimated jobs created: 0; 
Recovery (percent): 0%.

Major base: Gentile Air Force Station, Ohio; 
BRAC round: 1993; 
Estimated jobs lost: 2,804; 
Estimated jobs created: 1,800; 
Recovery (percent): 64%.

Major base: George Air Force Base, Calif; 
BRAC round: 1988; 
Estimated jobs lost: 506; 
Estimated jobs created: 1,631; 
Recovery (percent): 322%.

Major base: Glenview Naval Air Station, Ill; 
BRAC round: 1993; 
Estimated jobs lost: 389; 
Estimated jobs created: 4,098; 
Recovery (percent): 1,053%.

Major base: Griffiss Air Force Base, N.Y; 
BRAC round: 1993; 
Estimated jobs lost: 1,341; 
Estimated jobs created: 1,297; 
Recovery (percent): 97%.

Major base: Grissom Air Force Base, Ind; 
BRAC round: 1991; 
Estimated jobs lost: 792; 
Estimated jobs created: 1,036; 
Recovery (percent): 131%.

Major base: Guam Naval Complex; 
BRAC round: 1993; 
Estimated jobs lost: 2,193; 
Estimated jobs created: 552; 
Recovery (percent): 25%.

Major base: Homestead Air Force Base, Fla; 
BRAC round: 1993; 
Estimated jobs lost: 136; 
Estimated jobs created: 423; 
Recovery (percent): 311%.

Major base: Hunters Point Annex Naval Shipyard, Calif; 
BRAC round: 1991; 
Estimated jobs lost: 93; 
Estimated jobs created: 1,150; 
Recovery (percent): 1,237%.

Major base: Indianapolis Naval Air Warfare Center, Ind; 
BRAC round: 1995; 
Estimated jobs lost: 2,196; 
Estimated jobs created: 1,776; 
Recovery (percent): 81%.

Major base: Jefferson Proving Ground, Ind; 
BRAC round: 1988; 
Estimated jobs lost: 387; 
Estimated jobs created: 179; 
Recovery (percent): 46%.

Major base: Kelly Air Force Base, Tex; 
BRAC round: 1995; 
Estimated jobs lost: 10,912; 
Estimated jobs created: 5,296; 
Recovery (percent): 49%.

Major base: K.I. Sawyer Air Force Base, Mich; 
BRAC round: 1993; 
Estimated jobs lost: 788; 
Estimated jobs created: 1,202; 
Recovery (percent): 153%.

Major base: Letterkenny Army Depot, Pa; 
BRAC round: 1995; 
Estimated jobs lost: 2,512; 
Estimated jobs created: 916; 
Recovery (percent): 36%.

Major base: Lexington Army Depot, Ky; 
BRAC round: 1988; 
Estimated jobs lost: 1,131; 
Estimated jobs created: 1,316; 
Recovery (percent): 116%.

Major base: Long Beach Naval Complex, Calif; 
BRAC round: 1991; 
Estimated jobs lost: 4,487; 
Estimated jobs created: 3,975; 
Recovery (percent): 89%.

Major base: Loring Air Force Base, Maine; 
BRAC round: 1991; 
Estimated jobs lost: 1,311; 
Estimated jobs created: 1,161; 
Recovery (percent): 89%.

Major base: Louisville Naval Ordnance Station, Ky; 
BRAC round: 1995; 
Estimated jobs lost: 1,435; 
Estimated jobs created: 822; 
Recovery (percent): 57%.

Major base: Lowry Air Force Base, Colo; 
BRAC round: 1991; 
Estimated jobs lost: 2,275; 
Estimated jobs created: 5,666; 
Recovery (percent): 249%.

Major base: March Air Force Base, Calif; 
BRAC round: 1993; 
Estimated jobs lost: 997; 
Estimated jobs created: 678; 
Recovery (percent): 68%.

Major base: Mare Island Naval Shipyard, Calif; 
BRAC round: 1993; 
Estimated jobs lost: 7,567; 
Estimated jobs created: 1,363; 
Recovery (percent): 18%.

Major base: Mather Air Force Base, Calif; 
BRAC round: 1988; 
Estimated jobs lost: 1,012; 
Estimated jobs created: 4,498; 
Recovery (percent): 444%.

Major base: McClellan Air Force Base, Calif; 
BRAC round: 1995; 
Estimated jobs lost: 8,828; 
Estimated jobs created: 3,469; 
Recovery (percent): 39%.

Major base: Memphis Defense Distribution Depot, Tenn; 
BRAC round: 1995; 
Estimated jobs lost: 1,289; 
Estimated jobs created: 1,045; 
Recovery (percent): 81%.

Major base: Memphis Naval Air Station, Tenn; 
BRAC round: 1993; 
Estimated jobs lost: 250; 
Estimated jobs created: 148; 
Recovery (percent): 59%.

Major base: Myrtle Beach Air Force Base, S.C; 
BRAC round: 1991; 
Estimated jobs lost: 784; 
Estimated jobs created: 1,571; 
Recovery (percent): 200%.

Major base: New York (Staten Island) Naval Station, N.Y; 
BRAC round: 1993; 
Estimated jobs lost: 1,001; 
Estimated jobs created: 0; 
Recovery (percent): 0%.

Major base: Newark Air Force Base, Ohio; 
BRAC round: 1993; 
Estimated jobs lost: 1,760; 
Estimated jobs created: 944; 
Recovery (percent): 54%.

Major base: Norton Air Force Base, Calif; 
BRAC round: 1988; 
Estimated jobs lost: 2,133; 
Estimated jobs created: 4,551; 
Recovery (percent): 213%.

Major base: Oakland Military Complex, Calif; 
BRAC round: 1993; 
Estimated jobs lost: 2,834; 
Estimated jobs created: 487; 
Recovery (percent): 17%.

Major base: Ogden Defense Distribution Depot, Utah; 
BRAC round: 1995; 
Estimated jobs lost: 1,105; 
Estimated jobs created: 2,468; 
Recovery (percent): 223%.

Major base: Orlando Naval Training Center, Fla; 
BRAC round: 1993; 
Estimated jobs lost: 1,105; 
Estimated jobs created: 412; 
Recovery (percent): 37%.

Major base: Pease Air Force Base, N.H; 
BRAC round: 1988; 
Estimated jobs lost: 400; 
Estimated jobs created: 5,124; 
Recovery (percent): 1,281%.

Major base: Philadelphia Defense Distribution Supply Center, Pa; 
BRAC round: 1993; 
Estimated jobs lost: 1,485; 
Estimated jobs created: 1,270; 
Recovery (percent): 86%.

Major base: Philadelphia Naval Complex, Pa; 
BRAC round: 1991; 
Estimated jobs lost: 8,119; 
Estimated jobs created: 2,775; 
Recovery (percent): 34%.

Major base: Plattsburgh Air Force Base, N.Y; 
BRAC round: 1993; 
Estimated jobs lost: 352; 
Estimated jobs created: 1,096; 
Recovery (percent): 311%.

Major base: Presidio of San Francisco, Calif; 
BRAC round: 1988; 
Estimated jobs lost: 3,150; 
Estimated jobs created: 1,087; 
Recovery (percent): 35%.

Major base: Red River Army Depot, Tex; 
BRAC round: 1995; 
Estimated jobs lost: 386; 
Estimated jobs created: 183; 
Recovery (percent): 47%.

Major base: Reese Air Force Base, Tex; 
BRAC round: 1995; 
Estimated jobs lost: 1,238; 
Estimated jobs created: 468; 
Recovery (percent): 38%.

Major base: Sacramento Army Depot, Calif; 
BRAC round: 1991; 
Estimated jobs lost: 3,164; 
Estimated jobs created: 1,900; 
Recovery (percent): 60%.

Major base: San Diego Naval Training Center, Calif; 
BRAC round: 1993; 
Estimated jobs lost: 402; 
Estimated jobs created: 120; 
Recovery (percent): 30%.

Major base: Savanna Army Depot, Ill; 
BRAC round: 1995; 
Estimated jobs lost: 436; 
Estimated jobs created: 103; 
Recovery (percent): 24%.

Major base: Seneca Army Depot, N.Y; 
BRAC round: 1995; 
Estimated jobs lost: 273; 
Estimated jobs created: 1,205; 
Recovery (percent): 441%.

Major base: Sierra Army Depot, Calif; 
BRAC round: 1995; 
Estimated jobs lost: 374; 
Estimated jobs created: 7; 
Recovery (percent): 2%.

Major base: Stratford Army Engineering Plant, Conn; 
BRAC round: 1995; 
Estimated jobs lost: 1,400; 
Estimated jobs created: 0; 
Recovery (percent): 0%.

Major base: Tooele Army Depot, Utah; 
BRAC round: 1993; 
Estimated jobs lost: 1,942; 
Estimated jobs created: 907; 
Recovery (percent): 47%.

Major base: Treasure Island Naval Station, Calif; 
BRAC round: 1993; 
Estimated jobs lost: 454; 
Estimated jobs created: 282; 
Recovery (percent): 62%.

Major base: Tustin Marine Corps Air Station, Calif; 
BRAC round: 1991; 
Estimated jobs lost: 348; 
Estimated jobs created: 16; 
Recovery (percent): 5%.

Major base: Vint Hill Farms Station, Va; 
BRAC round: 1993; 
Estimated jobs lost: 1,472; 
Estimated jobs created: 901; 
Recovery (percent): 61%.

Major base: Warminster Naval Air Warfare Center, Pa; 
BRAC round: 1991; 
Estimated jobs lost: 2,311; 
Estimated jobs created: 789; 
Recovery (percent): 34%.

Major base: Watertown AMTL, Mass; 
BRAC round: 1988; 
Estimated jobs lost: 540; 
Estimated jobs created: 1,167; 
Recovery (percent): 216%.

Major base: Williams Air Force Base, Ariz; 
BRAC round: 1991; 
Estimated jobs lost: 728; 
Estimated jobs created: 3,704; 
Recovery (percent): 509%.

Major base: Wurtsmith Air Force Base, Mich; 
BRAC round: 1991; 
Estimated jobs lost: 690; 
Estimated jobs created: 830; 
Recovery (percent): 120%.

Total: 73 bases; 
Estimated jobs lost: 129,649; 
Estimated jobs created: 110,086; 
Recovery (percent): 85%.

Source: DOD Office of Economic Adjustment.

[End of table]

[End of section]

Appendix III: Economic Recovery at Major BRAC Locations:

Unemployment rates in BRAC-affected communities continue to compare 
favorably with the national average. Since 1997 (after completion of 
the implementation periods for the first two rounds in 1988 and 1991) 
and through the implementation periods of the last two rounds (1993 and 
1995), about 70 percent of the 62 BRAC-affected communities have 
consistently been at or below the national unemployment rate (see fig. 
6).

Figure 6: Comparison of the Percentage of 62 BRAC-Affected Communities 
at or below the Average National Unemployment Rate over Time:

[See PDF for image]

[End of figure]

According to our analysis of the annual unemployment rates for the 7-
month period ending July 31, 2004, most of the 62 BRAC-affected 
communities compared favorably with the national average and were 
consistent with the results we reported in 2002. During this period, 43 
of the 62 communities (69 percent) affected by base closures had 
unemployment rates at or below the average 7-month national rate of 5.8 
percent. This is one less community than in our 2002 report, when 44 
communities (71 percent) had average unemployment rates lower than the 
(then) average 9-month national rate of 4.6 percent. For all BRAC 
communities with higher-than-average calendar year 2004 unemployment 
rates through July 2004, 4 had double-digit rates: Merced County, 
California (Castle Air Force Base), 15.8 percent; Mississippi County, 
Arkansas (Eaker Air Force Base), 13.0 percent; Salinas, California 
(Fort Ord Army Base), 11.1 percent; and Iosco County, Michigan 
(Wurtsmith Air Force Base), 10.2 percent. Salinas, California, is the 
one addition to the other three communities that we also cited in our 
2002 report for having double-digit unemployment rates.

Annual real per capita income growth rates for BRAC-affected 
communities exhibit mixed results. The latest available data (1999-2001 
time frame) show that 30 (48 percent) of the 62 communities we studied 
had an estimated average real per capita income growth rate that was 
above the national average of 2.2 percent.[Footnote 29] This represents 
a decline from our 2002 report in which 33 communities (53 percent) 
matched or exceeded the national rate of 3.03 percent during the 1996-
1999 time frame. Additionally, our current analysis shows that of the 
32 communities below the national average, 6 communities (10 percent) 
had average annual per capita income growth rates that were close to 
the national average (defined as within 10 percent), while the 
remaining 26 communities (42 percent) were below the national average 
growth rate. Forty-six (74 percent) of the 62 communities had lower per 
capita income growth rates than when we last reported on them in 2002. 
Three communities--Merced, California (Castle Air Force Base); Austin-
San Marcos, Texas (Bergstrom Air Force Base); and Carroll County, 
Illinois (Savanna Army Depot)--had negative growth rates. By 
comparison, our 2002 report showed that no communities experienced a 
negative growth rate.

(350700):

FOOTNOTES

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

[2] In this statement, "transferred property" refers to property that 
has been deeded to another user; it does not include leased property.

[3] Report required by Section 2912 of the Defense Base Closure and 
Realignment Act of 1990.

[4] P.L. 107-107, section 3002 (Dec. 28, 2001).

[5] The 1988 round was completed under the Defense Authorization 
Amendments and Base Closure and Realignment Act (P.L. 100-526, Title II 
(Oct. 24, 1988), as amended). The last three rounds were completed 
under the Defense Base Closure and Realignment Act of 1990 (P.L. 101-
510, Title XXIX (Nov. 5, 1990), as amended).

[6] The number of recommendations may vary depending on how they are 
categorized. In this report, the recommendations include closures, 
realignments, disestablishments, relocations, and redirections. In a 
closure, all missions that are carried out at a base either cease or 
relocate, while in a realignment, a base remains open but loses and 
sometimes gains missions. "Disestablishments" and "relocations" refer 
to missions; those disestablished cease operations, while those 
relocated are moved to another base. "Redirections" refer to cases in 
which a BRAC Commission changes the recommendation of a previous 
commission.

[7] P.L. 107-107, Section 3002 (Dec. 28, 2001).

[8] A local redevelopment authority is any authority or instrumentality 
established by a state or local government and recognized by the 
Secretary of Defense, through the Office of Economic Adjustment, as the 
entity responsible for developing the redevelopment plan with respect 
to an installation or for directing implementation of the (land reuse) 
plan. 

[9] P.L. 107-314, ß 2811, 2812 (Dec. 2, 2002).

[10] P.L. 107-107, Title XXX (Dec. 28, 2001).

[11] The 1995 BRAC round recommendation to close family housing units 
on Fort Buchanan, Puerto Rico, was not implemented because the National 
Defense Appropriations Act for Fiscal Year 1999 (P.L. 105-262, Section 
8142 (Oct. 17, 1998), authorized the Secretary of Defense to retain all 
or a portion of the units to support the U.S. Army South's (USARSO) 
relocation from Panama to Fort Buchanan. On September 30, 2003, USARSO 
officially completed a further restationing from Puerto Rico to Texas.

[12] P.L. 107-107, Section 3006 (Dec. 28, 2001).

[13] UXO is ordnance that remains unexploded either through malfunction 
or design and can injure personnel or damage material. Types of UXO 
include bombs, missiles, rockets, artillery rounds, ammunition, or 
mines. DOD, Defense Environmental Restoration Program Annual Report to 
Congress--Fiscal Year 2003 (Washington, D.C., April 2004), Appendix F, 
page F-21. In this report UXO also refers to munitions and explosives 
of concern.

[14] This does not include about $1.9 billion in costs incurred by 
other DOD and federal agencies to provide assistance to communities and 
individuals impacted by BRAC. DOD estimates of annual recurring savings 
beyond fiscal year 2003 do not take into account the estimated $3.6 
billion in costs that are needed to complete environmental cleanup at 
BRAC bases.

[15] See GAO/NSIAD-97-151.

[16] P.L. 108-136, section 2822, (Nov. 24, 2003). 

[17] P.L. 108-375, Section 2832 (Oct. 28, 2004).

[18] See GAO/NSIAD-97-151.

[19] DOD has established seven joint cross-service groups to examine 
the following defense functional support areas--industrial, technical, 
medical, headquarters and support activities, supply and storage, 
education and training, and intelligence--during the 2005 BRAC process.

[20] GAO, Military Base Closures: Lack of Data Inhibits Cost-
Effectiveness Analyses of Privatization-in-Place Initiatives, GAO/NSIAD-
00-23 (Washington, D.C.: Dec. 20, 1999).

[21] P.L. 107-107, Section 3004 (Dec. 28, 2001).

[22] P.L. 107-107, Section 3002 (Dec. 28, 2001).

[23] GAO, Military Base Closures: Better Planning Needed for Future 
Reserve Enclaves, GAO-03-723 (Washington, D.C.: June 27, 2003).

[24] See Defense Base Closure and Realignment Commission, 1995 Report 
to the President (Washington, D.C.: July 1, 1995). The report 
recommendation language generally provided that the Army bases be 
closed or realigned, except that minimum essential ranges, facilities, 
and training areas be retained for reserve component use.

[25] The Army revised its estimate of costs and savings from these 
actions following an Army Audit Agency review of this issue in July 
1997.

[26] A payback period is the time required for cumulative estimated 
savings to exceed the cumulative estimated costs incurred as a result 
of implementing BRAC actions.

[27] GAO, Military Bases: Lessons Learned from Prior Base Closure 
Rounds, GAO/NSIAD-97-151 (Washington, D.C.: July 25, 1997).

[28] These teams are Education and Training, Headquarters and Support 
Activities, Industrial, Intelligence, Medical, Supply and Storage, and 
Technical. 

[29] Average annual real per capita income rates for 2002-2003 or later 
incorporate new Office of Management and Budget metropolitan area 
definitions that are not consistent with those for the communities we 
have assessed in this and previous BRAC update reports.

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