Issue Briefs

Following is a portion of the testimony a Defense Department facilities official presented to the House regarding the Pentagon’s request for another round of base closings.

Given the state of the budget and the fact that we demonstrated we can save money by closing and realigning facilities in Europe, the Administration is once again requesting the authority from Congress to conduct a BRAC round.

Many members of Congress have stated that the Government as a whole could more efficiently use its resources. We absolutely agree. BRAC is an objective, proven, and effective means of doing just that. The Deputy Secretary, the official responsible for the efficient management of the Department, has been clear on this. Last fall he said “[The] first place we should look at is our basing infrastructure.” He went on to talk about how large private companies would not retain excess capacity. Reiterating the need for BRAC, he said; “in this time of constrained resources, I just don’t understand why we are hamstringing ourselves. [M]aintaining that extra capacity is a big problem for us because it is wasteful spending, period. It is the worst type of bloat.”

Getting at this bloat is why the goal for BRAC remains focused on efficiency and savings.

We believe the opportunity for greater efficiencies is clear, based on three basic facts that have not changed over the last year:

* In 2004, DoD conducted a capacity assessment that indicated it had 24% aggregate excess capacity;
* In BRAC 2005, the Department reduced only 3.4% of its infrastructure, as measured in Plant Replacement Value – far short of the aggregate excess indicated in the 2004 study;
* Force structure reductions subsequent to that analysis – particularly Army personnel (from 570,000 to 450,000 or lower), Marine Corps personnel (from 202,000 to 182,000 or lower) and Air Force force structure (reduced by 500 aircraft) – point to the presence of additional excess.
A new BRAC round will be different than BRAC 2005, where we incurred significant costs by forwarding recommendations that did not promise significant savings. That said, in BRAC 2005, we also included many recommendations that returned the initial investment in less than 7 years. These “efficiency” recommendations cost $6 billion and resulted in $3 billion in annual savings. (The “transformation” recommendations cost $29 billion and return $1 billion in annual savings.)

We project that a new efficiency-focused BRAC round will save about $2 billion a year after implementation with costs and savings during the six year implementation being a wash at approximately $6 billion. Our projection is based on the efficiency rounds of the 1990s.
In addition to being a proven process that yields savings, BRAC has several advantages that we have outlined before in our testimony. I want to highlight a few of these:

* BRAC is comprehensive and thorough – all installations are analyzed using certified data aligned against the strategic imperatives detailed in the 20-year force structure plan
* The BRAC process is auditable and logical which enables the Commission to conduct an independent review informed by their own analysis and testimony of affected communities and elected officials
* The Commission has the last say on the Department’s recommendations – being fully empowered to alter, reject, or add recommendations
* The BRAC process has an “All or None” construct which prevents the President and Congress from picking and choosing among the Commission’s recommendations; thereby insulating BRAC from politics
* The BRAC process imposes a legal obligation on the Department to close and realign installations as recommended by the Commission by a date certain; thereby facilitating economic reuse planning by impacted communities; and grants the Department the authorities needed to satisfy that legal obligation.

While we are certainly open to some changes to the legislatively designed BRAC process that has remained essentially the same for each of the last four BRAC rounds, we should be careful about altering the fundamental principles of the process, particularly those that I outlined above.
For example, Congressman Adam Smith circulated an amended version of the BRAC authorization last year, proposing several changes to the BRAC process. His bill required a certification that the new round would primarily focus on eliminating excess infrastructure; it required emphasis on the cost criteria as well as military value; it required all recommendations to 15 be completed more quickly – within five years rather than six; and it required master plans that would constrain the execution of recommendations and limit cost growth. Taken together, the intent is clear: the Smith proposal is designed to create cost and business case constraints on the BRAC process from the outset – unfortunately while several aspects of that proposal would fundamentally alter key aspects of what makes BRAC work: the priority given to military value; insulation from politics; and the legal obligation to implement the recommendations together with the authorities needed to satisfy that legal obligation – the proposal advances a constructive discussion of BRAC authorization.

While not in the context of BRAC, recent legislation authorizing the Department to proceed with the relocation of Marines to Guam imposed a cost cap on the overall program in an effort to underscore cost consciousness and limit the Department’s fiscal exposure.
We would welcome discussion on mechanisms to limit cost and emphasize savings in future BRAC rounds. Ultimately, we recognize the reality that no matter how many times the Administration asserts that a future BRAC round will be about cost savings, Congress may want more than just our assurance.

Whatever changes we discuss, the key is maintaining the essence of the BRAC process: treating all bases equally, all or none review by both the President and Congress, an independent Commission, and a clear legal obligation to implement all of the recommendations in a time certain together with all the authorities needed to accomplish implementation (specifically MILCON).