Military Base Realignments and Closures: Higher Costs and Lower Savings Projected for Implementing Two Key Supply-Related BRAC Recommendations

摘要

Since the BRAC Commission issued its BRAC costs and savings estimates in 2005, DOD will spend more, save less, and take longer than expected to recoup up-front costs for the SS&D and DLR recommendations. Over the 2006-2011 implementation period, our analysis of DLA's data indicates that estimated net savings will be reduced by more than $1.8 billion compared to the BRAC Commission s estimate, with a net cost of about $222 million to DOD, because of increased estimated costs, decreased savings, and DLA s inclusion in the business plans of almost $243 million in expected savings that we believe should not be counted as BRAC savings. The $243 million in savings were to be achieved from implementing inventory reduction initiatives that were not directly the result of BRAC actions and would have occurred regardless of BRAC. While DLA asserts that these particular savings were enabled by the BRAC process, we believe that including savings unrelated to specific BRAC actions distorts and effectively overstates projected savings from implementing the BRAC recommendations. Our analysis further shows that the projected net annual recurring savings for both recommendations beginning in fiscal year 2012 have been reduced from $360 million to approximately $167 million, and the expected savings over a 20-year period ending in fiscal year 2025 have been reduced from almost $4.8 billion to about $1.4 billion. While some variances with initial estimates are to be expected as plans are refined, the magnitude of these variances is large and has resulted from a number of factors, such as the use of inaccurate or outdated data, misinterpretation of terms and specific data, and changes in operational requirements that occurred during the decision- making process for formulating the recommendations.