Defense Management:

More Reliable Cost Estimates and Further Planning Needed to Inform the Marine Corps Realignment Initiatives in the Pacific

GAO-13-360: Published: Jun 11, 2013. Publicly Released: Jun 11, 2013.

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What GAO Found

The Department of Defense's (DOD) preliminary cost estimate for its current realignment plan is not reliable, because it is missing costs and is based on limited data. According to DOD officials, DOD has not yet been able to put together a more reliable cost estimate because it will not have specific detailed information on the plan's requirements until the completion of environmental analyses and host nation negotiations. Currently, DOD estimates that it would cost approximately $12.1 billion to implement its realignment plan--not including the Australia segment of the realignment. Still, GAO found that DOD did not include some up-front practices that could have provided a more reliable estimate that are not dependent on the completion of the environmental analyses and host nation negotiations. Specifically, DOD omitted any costs associated with mobility support, a critical component of the implementation, from its cost estimate. Furthermore, although DOD based its cost estimate on several assumptions, there was no evidence DOD conducted analysis needed to determine the reliability of those assumptions. Without a reliable estimate, DOD will not be able to provide Congress and other stakeholders with the information Congress needs to make informed decisions regarding the realignment.

DOD has not developed an integrated master plan for its current realignment plan, and it has not developed a strategy to support the development and oversight of the Japanese construction projects associated with other realignment initiatives. DOD has taken initial steps to develop an integrated scheduling document based on currently known data, but indicated that specific requirements, schedules, and costs cannot be formalized in an integrated master plan until several studies and host nation negotiations are completed, which will take several years. Developing a master plan could enhance the management of the realignment by creating a systematic approach to planning, scheduling, and execution. In addition, DOD has not developed a strategy that identifies the resources needed to support the development of and oversight for these projects. According to best practices, a strategy identifies goals and resources and supports the implementation of a program. Without the information contained in an integrated master plan and a construction support strategy, Congress will be unable to make informed decisions about the order in which it needs to provide funding to support the realignment.

DOD has taken some steps to plan for the sustainment of U.S. forces on Okinawa and Guam, but it has yet to fully identify sustainment needs and costs for both locations during this period. At several installations on Okinawa, some of the infrastructure has severely deteriorated. DOD facilities planning guidance calls for updated facility master plans that capture requirements and propose solutions. On Guam, DOD has been maintaining an inventory of unoccupied family housing that could potentially be used for Marines relocating to Guam. However, DOD has not determined all the costs and benefits of maintaining this housing or the Marines' potential housing requirements--information needed to perform an economic analysis. Without an estimate of the sustainment requirements for Okinawa, the costs for maintaining housing, and the potential Marine requirements for housing on Guam, DOD will be unable to make informed decisions on whether continued investment in sustaining these facilities is warranted.

Why GAO Did This Study

DOD has stated that it intends to rebalance its defense posture toward the Asia-Pacific region. Japan hosts the largest U.S. forward-operating presence in this region; the majority of the U.S. forces in Japan are located in Okinawa. The United States and Japan planned to reduce the U.S. military presence on Okinawa by relocating approximately 9,000 Marines. DOD had originally planned to move the Marines only to Guam, but revised its plans in 2012 to include other locations in the Pacific. Congressional committees have directed GAO to examine DOD's initiatives in the Pacific, focusing on planning and costs. This report discusses the extent to which DOD has (1) developed a comprehensive cost estimate for the realignment of Marines, (2) planned for and synchronized other movements to coincide with the realignment, and (3) identified plans to sustain the force until all initiatives are implemented. To address these objectives, GAO reviewed relevant policies and procedures, reviewed and analyzed cost documents related to the realignment initiatives, interviewed DOD officials, and conducted site visits at U.S. military installations in the Pacific.

What GAO Recommends

GAO recommends that DOD develop more reliable cost estimates and an integrated master plan for the realignment of Marines, develop a mechanism to share annual updates on the status of each, and identify sustainment requirements for affected facilities until realignment initiatives are complete. DOD generally agreed with GAO's recommendations.

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

Recommendations for Executive Action

  1. Status: Open

    Comments: The Department is making progress regarding congressional concerns associated with posture in the Pacific, including the completion of the Guam Master Plan. The Department is currently in the process of reviewing the current cost estimate of the distributed laydown to determine when it can be updated to include new assumptions and parameters. However, comprehensive estimates for mobility support will not be available until completion of the required environmental planning documents. The Department plans to identify and incorporate comprehensive cost estimates as they become available upon completion of necessary environmental planning documents, to include the seven cost components identified for inclusion. Until these cost components can be updated, this recommendation will remain open.

    Recommendation: To provide DOD and Congress with more reliable information to inform investment decisions associated with the realignment of Marines and U.S. military posture in the Pacific, the Secretary of Defense should update the current cost estimate to include additional estimates for mobility support, and additional analysis that would quantify the risk impacts and parameters to account for its various assumptions changing. Furthermore, as appropriate environmental analyses and host nation negotiations are completed, update the estimate with comprehensive cost estimates (as identifiable) that factor in and include the following seven cost components associated with the current realignment plan: (1) Guam Physical Layout and Requirements; (2) Housing Requirements on Guam; (3) Requirements to Upgrade Utilities and Infrastructure on Guam; (4) Joint Training Range Complex Requirements including associated environmental mitigation in the Northern Marianas; (5) Marine Corps Requirements for Australia; (6) Marine Corps Requirements for Hawaii and Other U.S. Locations; (7) Mobility requirements to support the current realignment plan to conduct routine operations, training, and any contingency situations.

    Agency Affected: Department of Defense

  2. Status: Open

    Comments: DOD agrees that annual communication with regard to the movements in the Pacific are important to provide congressional committees. According to DOD officials, these conversations have happened, and supporting plans, like the Schedule for Maintaining Operational Capability of MCAS Futenma and Resources Necessary to Execute U.S. Force POsture Strategy in the Asia Pacific Region, have been conveyed to Congress. However, DOD has yet to provide any more specific as to what kind of up-to-date information they are providing, and if this information will be provided annually. Until more specific information is provided by DOD, this recommendation will remain open.

    Recommendation: To provide DOD and Congress with sufficient information to make informed decisions about the sequencing of projects supporting the realignment of Marines and the interdependent projects on Okinawa and about the timing for the funding needed to simultaneously support these projects and those already planned on mainland Japan, the Secretary of Defense should, as the master planning process continues over the next several years, require the Secretary of the Navy to develop annual updates on the status of planning efforts for appropriate congressional committees until such time as master plans are completed for each geographic segment of the realignment. These updates should include, but not be limited to, providing congressional committees with up-to-date information on the status of initiatives, identified requirements and time frames, and any updated cost information linked to specific facilities or projects.

    Agency Affected: Department of Defense

  3. Status: Open

    Comments: DOD partially concurred with this recommendation saying that the The U.S. Army Corps of Engineers manages the design and construction process for posture-related initiatives in Iwakuni and Okinawa and will have to coordinate with appropriate military service officials to develop a strategy to identify how this process should be handled moving forward; however, this effort necessarily relies upon a detailed master plan, that has been coordinated with U.S. Forces Japan (USFJ), the U.S. Marine Corps (USMC) Installations-Pacific, and Headquarters (HQ), USMC, to identify necessary resources to support any surge in construction. Although the Guam Master Plan has been completed, an overarching master plan has not. DOD has not provided updated information regarding how the Army Corps of Engineers plans to coordinate with appropriate service officials; therefore, this recommendation will remain open.

    Recommendation: To provide DOD and Congress with sufficient information to make informed decisions about the sequencing of projects supporting the realignment of Marines and the interdependent projects on Okinawa and about the timing for the funding needed to simultaneously support these projects and those already planned on mainland Japan, the Secretary of Defense should direct the Secretary of the Army to require the Army Corps of Engineers to coordinate with appropriate military service officials involved in the planning and management of Defense Policy Review Initiative (DPRI) projects in Japan, including U.S. Forces-Japan, Marine Corps Installations Pacific, and Marine Corps Headquarters, to develop a strategy to identify how the design and construction process of DPRI projects should be handled moving forward and the necessary resources needed to support any surge in construction associated with posture-related initiatives in both Iwakuni and Okinawa.

    Agency Affected: Department of Defense

  4. Status: Open

    Comments: To date, DOD has not provided sufficient evidence to support that any updates have been completed for base master plans in Okinawa. Until information is provided, this recommendation will remain open.

    Recommendation: To aid DOD and Congress in obtaining sufficient information to make prudent investment decisions for the sustainment of U.S. forces on Okinawa and Guam while implementing the planned movements associated with the realignment of Marines and the consolidation efforts on Okinawa, the Secretary of Defense should direct the appropriate service officials to update Okinawa installation master plans to include sustainment requirements and the costs to sustain the U.S. presence on Okinawa until the Marine realignment and Okinawa consolidation efforts are completed. At a minimum, these plans should identify both short-term needs and long-term needs to account for the uncertainty regarding the time needed to implement the realignment and consolidation initiatives on Okinawa.

    Agency Affected: Department of Defense

  5. Status: Open

    Comments: The Department has made progress with the planning of posture moves in the Pacific. Specifically, Commander, USPACOM has completed an assessment on the ability of the laydown to support contingencies, DOD has completed a schedule for maintaining the operational capability of Marine Corps Air Station Futenma, DOD has submitted a report identifying military resources necessary to execute the U.S. force posture strategy in the Asia Pacifc, and the Guam Master Plan has been completed. However, DOD has not provided specific information regarding schedule and unit movement updates on Okinawa. Until there is support that this information exists and is being provided to the appropriate Air Force officials, this recommendation will remain open.

    Recommendation: To aid DOD and Congress in obtaining sufficient information to make prudent investment decisions for the sustainment of U.S. forces on Okinawa and Guam while implementing the planned movements associated with the realignment of Marines and the consolidation efforts on Okinawa, the Secretary of Defense should direct appropriate service officials to provide, as they become available, annual master schedule and unit movement updates associated with the realignment initiatives on Okinawa to the appropriate Air Force officials. These updates should include any updated housing requirements such as the demographics of Marine families required to be housed on Okinawa during the future phases of the realignment initiatives on Okinawa, thus allowing the appropriate Air Force officials to perform up-to-date assessments and develop housing investment strategies reflecting the updated schedule and housing requirements.

    Agency Affected: Department of Defense

  6. Status: Open

    Comments: In July 2014, DOD completed the Guam Master Plan with detailed appendicies and cost data. During the requirements generation step of the process, MARFORPAC generated operational and training requirements in accordance with the approved Distributed Laydown. These requirements were validated by HQMC and PACOM to ensure National and Theater Strategic Objectives are met, as well as operational plans, theater security cooperation, humanitarian assistance, and homeland defense support. Facility requirements were then developed to support operational and training requirements. DD1391's and Basic Facility Requirements (BFR) were developed and are included in Appendix D of the Guam Master Plan; these were created by NAVFACPAC using DOD, DON, USMC regulations and in accordance with Unified Facilities Criteria. They were subsequently validated by MARFORPAC, PP&O, and I&L to ensure compliance with functional/operational requirements. Finally, non-MILCON costs were developed based on a collaborative effort between SPAWAR, NWSC, TECOM, C4 and MARFORPAC. These costs were validated by HQMC. The next step in the process was site planning, based on Conceptual Development Plans (CDPs) which utilized the facilities requirements and created an overall layout to include QOL and utility requirements. Although DOD has completed the master plan for Guam, it has not provided any specific information regarding the costs or prudence of maintaining vacant housing on Guam. Until DOD provides that information, this recommendation will remain open.

    Recommendation: To aid DOD and Congress in obtaining sufficient information to make prudent investment decisions for the sustainment of U.S. forces on Okinawa and Guam while implementing the planned movements associated with the realignment of Marines and the consolidation efforts on Okinawa, the Secretary of Defense should direct the Secretary of the Navy to conduct an economic analysis to include assessing the costs of maintaining vacant housing on Guam to arrive at an informed decision weighing the cost of maintaining or renovating this housing versus the construction of new facilities to support the requirements for the Marine Corps realignment to Guam.

    Agency Affected: Department of Defense

 

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