Defense Infrastructure: DOD Should Better Manage Risks Posed by Deferred Facility Maintenance
Fast Facts
DOD has over 550,000 buildings and other facilities worldwide, with an estimated value of about $1.3 trillion. These facilities need ongoing maintenance to keep them in good working order—known as "facility sustainment."
DOD's goal is to fund at least 90% of its facility sustainment needs annually. Facility sustainment funding didn't meet that goal in FYs 2017-2019 due to competing priorities. This contributed to DOD's deferred maintenance backlog, which was at least $137 billion in FY 2020.
DOD could better manage the risk of its backlog by improving how it implements its new facility management system. We recommended doing this, and more.
Building on Marine Corps Base Hawaii in "failing" condition
Highlights
What GAO Found
To estimate the funding needed to sustain its roughly 550,000 facilities worldwide, the Department of Defense (DOD) uses cost factors that are comparable to those used by other selected federal agencies, including factors that account for geographic differences and inflation. However, DOD does not fully account for the costs of sustaining facilities that exceed their expected lifespans. Thus, DOD likely underestimates its annual funding requirements, because nearly 30 percent of its facilities have exceeded their expected lifespans.
DOD's facility sustainment funding has not aligned with funding goals, although the gap has been decreasing (see figure). From fiscal year (FY) 2017 through FY2020, the six components reviewed by GAO estimated a total of $47.5 billion in facility sustainment funding requirements. The budget request for DOD identified $38.3 billion (80.6 percent of requirements). Appropriated amounts made available for facility sustainment totaled $38.2 billion (80.5 percent of requirements). And DOD, using appropriated amounts and other allowable amounts, obligated $38.9 billion (81.9 percent of requirements). DOD's goal is for components to fund facility sustainment at a minimum of 90 percent of annually estimated requirements, but according to DOD officials competing priorities led to budget requests below those goals.
Funding for DOD Facility Sustainment Compared to DOD Funding Requirements and Goals
Note: According to DOD, obligations surpassed 90 percent of estimated requirements in FY2020 due to reprogramming.
For fiscal year 2020, DOD reported deferred maintenance backlogs totaling $137 billion, but DOD has yet to implement the Sustainment Management System (SMS), which it expects will allow it to better manage the risk of these backlogs. Installation officials stated that deferred maintenance leads to the premature failure of facility systems and often leads to more costly repairs, and that maintenance is most often delayed for lower-priority facilities such as living quarters and childcare facilities. SMS implementation is over 3 years behind schedule, does not have dedicated funding, and is being implemented inconsistently by DOD components, particularly as it pertains to facility condition assessments. Without addressing these issues, DOD's efforts to mitigate risks to its management of facility sustainment will be jeopardized.
Why GAO Did This Study
DOD manages facilities worldwide with an estimated aggregate plant replacement value of about $1.3 trillion. Sustaining these facilities involves maintenance and repair to keep them in good working order. Deferring maintenance can lead to deterioration, potentially affecting DOD's ability to support missions.
GAO was asked to review DOD facility sustainment. This report examines the extent to which (1) DOD's cost factors for estimating its facility sustainment funding requirements are comparable to those of other federal agencies and fully account for DOD's sustainment costs; (2) DOD's facility sustainment funding aligns with its funding goals; and (3) DOD has a deferred maintenance backlog and a process for managing any such backlog. GAO reviewed documentation and interviewed officials about DOD's process for estimating facility sustainment funding requirements and managing deferred maintenance; analyzed funding and deferred maintenance data for FY2017 through FY2020; and contacted a non-generalizable sample of 12 DOD installations from six DOD components to discuss facility sustainment.
Recommendations
GAO made four recommendations, including that DOD account for the costs to sustain facilities that exceed their expected lifespans and improve the implementation of SMS. DOD did not concur with the first recommendation but concurred with the other three to improve SMS implementation. GAO maintains all four recommendations are valid, as discussed in this report.
Recommendations for Executive Action
| Agency Affected | Recommendation | Status |
|---|---|---|
| Department of Defense | The Secretary of Defense should ensure that the Under Secretary of Defense for Acquisition & Sustainment, in coordination with the FSM Configuration/Support Panel, collects, assesses, and revises—as appropriate—the sustainment unit costs of facility analysis categories in which the average ages of the facilities exceed their expected lifespans. (Recommendation 1) |
DOD non-concurred with this recommendation. In its response to our draft report, DOD acknowledged that FSM does not adequately account for the age of facilities when estimating its annual facility sustainment funding requirements. DOD also stated that within the next 5 years it would no longer use FSM to determine its facility sustainment funding requirements, and for that reason it would be fiscally inappropriate to make further investments in FSM. DOD reiterated this response in December 2022. We agree with DOD that it should avoid investing resources in a system that will ultimately be obsolete. However, as noted in this report, DOD's FSM Configuration/Support Panel currently meets three to four times each year to review and update FSM's business rules and cost factors, including facility sustainment unit costs. DOD could use this existing process to collect, assess, and revise-as appropriate-the sustainment unit costs of facility analysis categories in which the average age of facilities exceeds their expected lifespan. Doing so would ensure that DOD more accurately accounts for the additional costs to sustain older facilities-29 percent of Army, Air Force, Navy, and Marine Corps buildings in use or in caretaker status have exceeded their expected lifespan-until FSM is retired. As such, we continue to believe our recommendation is valid. As of August 2024, DOD has taken no action, but we will continue to monitor implementation of the recommendation and update the implementation status as warranted.
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| Department of Defense |
Priority Rec.
The Secretary of Defense should ensure that the Under Secretary of Defense for Acquisition & Sustainment, in coordination with the DOD components, sets milestones and holds component leadership accountable for implementing SMS. (Recommendation 2) |
DOD concurred with this recommendation. DOD's initial corrective action plan stated that the Under Secretary of Defense for Acquisition and Sustainment, in collaboration with the U.S. Army Corps of Engineers, would identify relevant milestones and completion dates for implementing SMS, periodically brief senior leaders on the status of these milestones to enhance accountability, and issue policy that sets out DOD components' responsibilities for implementing SMS. In August 2023, DOD told us it was implementing a cloud-based replacement for SMS, called "eSMS." DOD's update noted that the department will develop a DOD Instruction that includes the same steps outlined in the initial corrective action plan prepared for this recommendation. These steps would meet the intent of our recommendation but DOD's update noted that the DOD Instruction will not be completed until approximately July 2024. In September 2024 DOD updated us on their progress toward developing a DOD instruction, stating that the instruction was now estimated to be issued in October 2025. Because DOD had not yet set milestones and held component leadership accountable for implementing eSMS, we continue to consider this recommendation as open. We will continue to monitor implementation of the recommendation, and update the recommendation status as warranted.
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| Department of Defense | The Secretary of Defense should ensure that the heads of the DOD components, in coordination with the Under Secretary of Defense for Acquisition & Sustainment and the Under Secretary of Defense (Comptroller), develop funding plans to support continued implementation of SMS facility condition assessments. (Recommendation 3) |
DOD concurred with this recommendation. In a December 2022 update, DOD stated that the Office of the Secretary of Defense will shift appropriate funding to the Lead Service for SMS development, implementation, and maintenance. In September 2024, DOD officials told us that they are drafting a new DoDI to establish the Army as the lead service for SMS and provide guidance for resourcing SMS and a governance structure. The estimated issuance for this DoDI is March 30, 2025. We will continue to monitor implementation of the recommendation, and update the recommendation status as warranted.
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| Department of Defense |
Priority Rec.
The Secretary of Defense should ensure that the Under Secretary of Defense for Acquisition & Sustainment, in coordination with the DOD components, conducts an assessment of the SMS implementing guidance to determine which elements of SMS should be applied consistently across the components, and uses the results of that assessment to update the guidance for SMS condition assessments to ensure that facility condition data are comparable across the department. (Recommendation 4) |
DOD concurred with this recommendation. In August 2023 DOD provided an update on their progress toward implementing this recommendation. Specifically, the department is developing a cloud-based version of SMS, called "eSMS." As part of the development of eSMS, DOD has assessed the linkage between real property codes and the relevant SMS modules. In addition, DOD stated that SMS governance bodies will identify and resolve any guidance gaps or need for clarification as part of eSMS implementation, expected in Fiscal Year 2024. DOD stated that this step will standardize eSMS elements and data collection across the department. This progress is encouraging, and once these steps are complete should be sufficient to have met the intent of our recommendation. However, as of April 2024 DOD has not ensured that updates to guidance for eSMS contain information to ensure that facility condition data are comparable across the department. In September 2024, DOD stated that it has a two-phased approach to address this recommendations. The first phase is to issue a DoDI establishing Army as lead service for SMS with programming guidance for the other Services and a governance structure (also related to GAO recommendation #3). The second phase is to issue a DoDI that has detailed guidance and metrics for Facility Sustainment, Restoration, and Modernization. DOD stated that both DODI issuances are projected by March 30, 2025. We will continue to monitor implementation of the recommendation and update the recommendation status as warranted.
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