Defense proposes major consolidation of finance services

The recommendation would involve closing 21 Defense Finance and Accounting Service facilities.

The Defense Department has proposed a dramatic reduction of Defense Finance and Accounting Service facilities as part of its base realignment and closure recommendations.

The plan, put forward by the Pentagon Friday, involves closing 21 domestic DFAS facilities, reducing operations at two others and concentrating operations at military and federal facilities in Colorado, Indiana and Ohio. The reductions are designed to reduce excess capacity, eliminate redundancy and ensure that DFAS facilities meet Defense Department security standards, according to Pentagon documents.

A Defense spokesman said it was too early to say if the overhaul would result in a reduction in the DFAS workforce.

DFAS processes payroll transactions, travel payments and health benefits funds for members of the military, civilian Defense employees, retirees and annuitants. The agency also manages foreign military sales and some commercial invoices.

Overall, the Pentagon has proposed closing 33 major facilities nationwide, realigning 29 others, and closing or realigning hundreds of smaller military locations. The recommendations will be sent to the nine-member BRAC commission. That group is scheduled to pass its recommendations on to President Bush by Sept. 8. The president and Congress are required to accept or reject the closures and realignments in their entirety.

In the BRAC recommendations, Pentagon officials estimated that 43 percent of DFAS administrative space and 69 percent of warehouse space was not needed.

The Pentagon recommended closing DFAS locations at Rock Island, Ill.; Pensacola Saufley Field, Fla.; Norfolk Naval Station, Va.; Lawton, Okla.; Pensacola Naval Air Station, Fla.; Omaha, Neb.; Dayton, Ohio; St. Louis, Mo.; San Antonio; San Diego; Pacific Ford Island, Hawaii; Patuxent River, Md.; Limestone, Maine; Charleston, S.C.; Orlando, Fla.; Rome, N.Y.; Lexington, Ky.; Kansas City, Mo.; Seaside, Calif.; San Bernadino, Calif.; and Oakland, Calif.

DFAS facilities in Arlington, Va., and Cleveland would be realigned. The Arlington facility would keep a "minimum essential DFAS liaison staff" to support some Pentagon and congressional needs. The Cleveland facility would retain a staff for Military Retired and Annuitant Pay Services operations.

Arlington is slated to lose seven military and 401 civilian positions, according to the Pentagon. Defense officials have proposed reducing the Cleveland site by 15 military and 1,013 civilian jobs.

The DFAS facilities that will be gaining employees and operations are at the Defense Supply Center in Columbus, Ohio, the Buckley Air Force Base Annex in Denver and the MG Emmett J. Bean Federal Center in Indianapolis.

Buckley Air Force Base is slated to increase its workforce by 94 employees and the Pentagon has proposed adding 1,758 workers at the Defense Supply Center in Columbus, but it is unclear if all those jobs will be associated with the finance service.

The Pentagon explicitly noted, however, that the DFAS operation in Indianapolis will be gaining 3,378 civilian employees, 114 uniformed personnel and three contractors, for a total boost of 3,495.