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Military Base Closures: Lack of Data Inhibits Cost-Effectiveness of Analyses of Privatization-in Place Initiatives

NSIAD-00-23 Published: Dec 20, 1999. Publicly Released: Dec 20, 1999.
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Highlights

Pursuant to a congressional request concerning the privatization in place of select Department of Defense industrial facilities, GAO focused on: (1) determining how contractors are responding to decreasing workloads at these privatized facilities; (2) comparing the cost-effectiveness of the privatization-in-place operations to the former government-run operations; and (3) identifying the impact of privatization on excess capacity in the Department's industrial infrastructure.

Recommendations

Recommendations for Executive Action

Agency Affected Recommendation Status
Office of the Secretary of Defense Should the Department of Defense consider privatization in place in the future, the Secretary of Defense should require the services to: (1) consider the overall cost-effectiveness of this approach in reducing operating costs and excess capacity in the combined public and private sectors supported by the defense budget; (2) retain an adequate baseline of historical government costs, preferably on a per-unit basis, to assess the cost-effectiveness of privatization in place; and (3) periodically reassess the cost effectiveness of prior privatization-in-place initiatives, in light of excess capacity in other private sector and Department of Defense facilities and continuing declines in military workloads.
Closed – Not Implemented
DOD did not concur with the recommendation, stating that determining reductions in private sector defense infrastructure operating costs is prohibitive and that it is unreasonable to require DOD activities to retain historical baseline cost data to assess privatization-in-place initiatives because it would place unnecessary burdens on these activities. DOD also stated that periodic reassessments of privatization-in-place initiatives are unnecessary because future sourcing decisions will be based on competitions, not on analysis of historical baselines. While DOD has taken no action, GAO continues to believe that the recommendation is valid.

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Topics

Air Force facilitiesBase closuresBase realignmentsContractorsGovernment contractsMilitary basesMilitary cost controlNaval facilitiesPrivatizationU.S. Navy