BRAC bleeding DOD by the billions

The Defense Department’s 2005 round of the Base Realignment and Closure Act so far costs 67 percent more than originally planned, with up-front costs ballooning from $21 billion to $35 billion, according to a new Government Accountability Office report. Technology costs, including IT needed to equip new facilities, account for some of the total.

The streamlining effort was designed to effect Pentagon savings – specifically, an estimated $4.2 billion per year in net annual recurring savings – but instead has been compounded by increasing costs, particularly in military construction. That $4.2 billion in annual savings currently stands at $3.8 billion, a decline of almost 10 percent, GAO reported.

The 2005 round of BRAC was the fifth, and most ambitious, of activities to realign the military that began in 1988, costing nearly as much as the previous four rounds combined in order to “enhance the military value.” It included hundreds of actions involving 800 defense locations and the planned relocation of 125,000 personnel, GAO noted.

The initial plan was to generate recurring savings to be reinvested in other DOD programs. It was designed to yield a 20-year net present value – which represents both the up-front investment costs and long-term savings – of nearly $36 billion. That number has fallen by 72 percent, to about $10 billion.

Of the 182 approved BRAC 2005 projects, more than half are expected to cost more than they’ll save. Fourteen of the projects are blamed for the bulk of the cost overruns, mainly from “additional building projects and additions to planned projects, which DOD deemed necessary after implementation began,” GAO found.

Those projects, which GAO said account for 72 percent of the overall cost increases, include:

• Realigning Walter Reed Army Medical Center to Bethesda National Naval Medical Center, Md., and Ft. Belvoir, Va., which increased from a planned $989 million to $2.7 billion;
• Consolidating the National Geospatial-Intelligence Agency at Ft. Belvoir, increasing from $1 billion to $2.6 billion;
• Closing Ft. Monmouth, N.J., which increased from $780 million to nearly $1.9 billion;
• Establishing the San Antonio Regional Medical Center and realigning training to Ft. Sam Houston, Tex., which increased from just more than $1 billion to nearly $2 billion;
• Realigning maneuver training to Ft. Benning, Ga., which increased from $773 million to almost $1.7 billion.

As Walter Pincus noted in the Washington Post, a number of the overruns were entirely avoidable.

For example, NGA failed to foresee it would need a new technology center and a 200,000 sq. ft. data-storage warehouse, which cost an additional $726 million over the original estimated cost.