Defense Infrastructure:

In-Kind Projects Initiated during Fiscal Years 2011 and 2012

GAO-14-280R: Published: Apr 9, 2014. Publicly Released: Apr 9, 2014.

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What GAO Found

The Department of Defense’s (DOD) processes for selecting in-kind projects in Asia vary by country and by whether the project is intended to support force structure initiatives or enduring installations, although these efforts are not mutually exclusive; domestically, DOD’s processes for selecting in-kind projects vary by military service and statutory authority. In Asia, the selection of in-kind projects to support initiatives for relocating U.S. troops within Japan and the Republic of Korea generally results from a schedule-driven process based on resources and infrastructure made available by the host nation to fulfill initiatives agreed to in prior years with target dates for completion, and input from affected military bases. The selection of in-kind projects to support enduring installations is characterized by priority-based processes with input from installations and unit commanders. All in-kind projects to support U.S. forces in Asia result from host nation support as agreed to bilaterally, with the exception of facilities provided through the Japan Facilities Improvement Program, which is a voluntary effort on the part of Japan. All DOD facility planning and project selection at enduring locations is based on military and operational requirements, independent of location. When compared with the project selection processes in Japan, DOD has more ability to prioritize and select projects in the Republic of Korea. Domestically, the services select projects based on military and operational need regardless of location but the processes vary somewhat depending on the authorizing statute for the in-kind projects—for example, the authorities for enhanced use leases, exchanges, or easements.

During fiscal years 2011 and 2012, DOD initiated 107 in-kind construction and renovation projects overseas (in Japan, the Republic of Korea, and Germany) and in the continental United States. In Asia, DOD initiated 68 construction and renovation projects and DOD officials provided estimated values totaling about $1.3 billion for 44 of those projects. DOD initiated 38 in-kind projects in Japan, and DOD independent budget estimates for 14 of the 38 projects indicate that the projects are valued at $257 million; however, at the time of our study, there were no DOD planning estimates available for the remaining 24 projects. Under the bilateral agreements between the United States and the Government of Japan, Japan is not obligated to disclose the value of these projects. DOD initiated 30 projects in the Republic of Korea, and DOD officials estimate that these projects were valued at about $1 billion. Most of the in-kind projects initiated in Japan and the Republic of Korea were for operations and training facilities and for housing and community facilities. The remaining projects were for utility and ground improvements and for maintenance and production, supply, administrative, and hospital and medical facilities. In Germany, DOD initiated 3 in-kind projects funded with residual value payments valued at about $11.3 million. Domestically, the Air Force began 24 in-kind projects during fiscal years 2011 and 2012, while the Army began 5, and the Navy began 7. These 36 in-kind construction and renovation projects were valued at $421.1 million, including one Army housing and community project valued at $334 million. The military services also began 3 projects valued at $73.4 million for operations and training; and 32 projects valued at $13.7 million for other purposes. Twenty of the Air Force’s 24 projects were for an easement granted to Florida’s Mid-Bay Bridge Authority (a state agency) worth an estimated value of about $7.8 million in exchange for building a road connector on Air Force property. The 20 in-kind projects resulting from the easement primarily went towards operations and training which comprised about 83 percent of Air Force’s in-kind construction and renovation projects initiated during fiscal years 2011 and 2012.

Why GAO Did This Study

The Department of Defense (DOD) has, for over 20 years, accepted from host nations and domestic third parties facilities constructed or renovated either as host nation support, or in exchange for goods, services, real property, or an interest in real property that the department provides to third parties. DOD uses these in-kind construction or renovation projects as alternatives to using appropriated funds to help manage a global, real-property portfolio with more than 555,000 facilities worldwide and with a replacement value of nearly $850 billion. The National Defense Authorization Act for Fiscal Year 2013 mandates GAO to report on the construction or renovation of DOD facilities with in-kind payments, covering in-kind projects begun during the preceding 2 years. To respond to this mandate, we examined the processes DOD used to select in-kind construction and renovation projects in Asia (Japan and the Republic of Korea) and domestically, and provided a listing of each facility constructed or renovated in-kind for DOD (including those in Germany), the value in U.S. dollars of that construction or renovation, the source of the in-kind project, the agreement pursuant to which the construction or renovation was performed, and a description of the purpose and need for the construction or renovation.

What GAO Recommends

GAO is not making any recommendations.

For more information, contact Brian J. Lepore at 202-512-4523 or leporeb@gao.gov.

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