Review questions Pentagon’s base closure cost savings estimates

Congressional auditors found in a report released Friday that the Defense Department's process for deciding which military bases to shutter was "logical, reasoned and well- documented," but questioned some of the Pentagon's cost savings estimates.

The Government Accountability Office review of the Pentagon's base realignment and closure process, mandated by law, concluded that Defense officials had varying success in achieving their 2005 BRAC goals of reducing surplus infrastructure to create savings, furthering the department's transformation and encouraging greater cooperation among the military services.

The 273-page report (GAO-05-785) raised some questions about Defense's projection of $50 billion in savings from this BRAC round, noting that the closure and realignment process requires an upfront investment of an estimated $24 billion.

"While we believe [the Defense Department's] overall recommendations, if approved and implemented, would produce savings, there are clear limitations associated with the projected savings," the report states.

Much of the savings would result from the elimination of jobs held by military service personnel. But Defense officials have said people in these positions will be reassigned to other positions. "Without recognition that these are not dollar savings that can be readily applied elsewhere, GAO noted, "this could create a false sense of savings available for other purposes."

GAO auditors also expressed "heightened" concern about savings projections resulting from the transformation of business processes at Defense, due to "past tendencies to reduce related operating budgets in advance of actual savings being known and fully realized."

"We found that the concept of transformation is not well-defined," the report stated.

GAO recommended, and the Pentagon agreed, that Defense Secretary Donald Rumsfeld develop a method for tracking and updating savings estimates as the BRAC recommendations are implemented.

Since the report was due by law July 1, the Defense Department did not have a chance to formally respond to it. Pentagon spokesman Glenn Flood said such a reply will be sent within two weeks.

In May, Rumsfeld unveiled a list of 222 BRAC recommendations, including 837 closures and realignments. The GAO report will be used by the independent Defense Base Closure and Realignment Commission in completing its review of Rumsfeld's recommendations and putting together the final BRAC list.

Those recommendations will be submitted to President Bush Sept. 8 and he must approve or disapprove them by Sept. 23. Congress then must either reject the list or allow it to become official within 45 days of presidential endorsement.