Military Buildup on Guam:

Costs and Challenges in Meeting Construction Timelines

GAO-11-459R: Published: Jun 27, 2011. Publicly Released: Jun 27, 2011.

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In 2004, the bilateral U.S. and Japanese Security Consultative Committee began a series of sustained security consultations to strengthen the U.S.-Japan security alliance by establishing a framework for the future of the U.S. force structure in Japan. The United States and Japan agreed to reduce the U.S. force structure in Japan while maintaining the U.S. force presence in the Pacific theater by relocating units to other areas, including Guam. As part of this effort, called the Defense Policy Review Initiative, about 8,600 Marines and 9,000 dependents were to move from Okinawa, Japan, to Guam by a projected date of 2014, as described in the bilateral agreement. On June 21, 2011, however, United States and Government of Japan officials noted that completion of the Marine relocation will not meet the previously targeted date of 2014, but confirmed their commitment to complete the relocation at the earliest possible date after 2014. 2 The Department of Defense (DOD) also plans to move other military forces and equipment to Guam on different schedules in implementing a new strategic approach in the Pacific as part of its worldwide Integrated Global Presence and Basing Strategy. These latter initiatives involve each of the military services and the Army National Guard working concurrently to complete infrastructure projects to support Guam-based U.S. forces and their dependents. If the initiatives are implemented as planned, the Guam-based DOD population would grow from about 15,000 in 2007 to about 39,000 by 2020. As you requested, we evaluated issues surrounding DOD's military buildup on Guam. Specifically, we (1) examined the estimated military construction costs for the buildup and determined whether bid savings3 existed for military construction projects in fiscal years 2009 and 2010, and (2) assessed certain challenges that DOD faces related to the buildup.

The military buildup on Guam is likely to cost about $7.5 billion in military construction funding from fiscal years 2009 through 2016, according to the latest estimates by DOD. However, DOD has yet to fully identify some costs associated with the buildup. For example, DOD has not developed cost estimates for the air and missile defense task force that may be placed on Guam. In addition, construction for future facilities for the Air Force Guam Strike initiative is expected to occur over a 16-year period, which extends beyond the current costs that the Air Force has estimated through fiscal year 2015. In addition, the Government of Japan is expected to provide up to an additional $6.09 billion in funding for infrastructure and facilities to support the Marine Corps relocation, which includes directly funding up to $2.8 billion in military construction projects on Guam, including utilities and site improvements for future facilities. Japan is also expected to fund up to $3.29 billion in special purpose entity loans and equity investments for installation support infrastructure for utilities and for military family housing, and, according to DOD officials, Japan is expected to recoup most of these funds over time in the form of repayments from the U.S. government and rents paid by Marine Corps servicemembers through their housing allowances. The Government of Guam is largely responsible for obtaining funding for needed off-installation infrastructure projects, such as off-base roads and utilities, and it estimated that it needs approximately $3.2 billion for buildup-related projects and programs. In addition, we found that DOD, the Government of Japan, and the Government of Guam total cost estimates for the Guam-based military buildup are almost $23.9 billion to date, including the $3.29 billion that Japan is expected to recoup over time. We also found that DOD had bid savings of about $93 million for 11 of the 13 military construction projects for which it had awarded contracts in fiscal years 2009 and 2010 to support the Guam buildup. In these cases, the winning contract bids were lower than the amounts that Congress had appropriated or the amount that was otherwise designated for the project. However, bid savings may often be used to offset cost overruns on other projects or future requirements for a specific military construction project or for other projects around the world without further congressional authorization. In the cases we examined, most of the bid savings were applied to offset the impact of rescissions of military construction appropriations or had been transferred or reprogrammed to other projects as of the time of our report. DOD continues to update but has not yet finalized its Guam Joint Military Master Plan (master plan) for the military buildup on Guam and faces certain unresolved challenges which may delay some construction projects, although it has taken some steps to address many of these challenges. The congressional defense committees have been requesting a master plan for Guam since 2006. Delays in finalizing the master plan may lead DOD to make budget requests for military construction projects for the relocation of the Marines from Okinawa, Japan, to Guam without reasonable assurances that the funds are needed in the time frame in which they are being requested. Challenges that could delay some construction projects include the Navy's deferral of decisions on (1) selection of a site for the live-fire training range complex on Guam to support needed Marine Corps training, (2) selection of a site for the transient aircraft carrier berth within Apra Harbor, and (3) the potential deployment of an air and missile defense task force on Guam and the construction of associated infrastructure to support the task force. We are not making any recommendations in this correspondence.

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