The Defense Department's estimate that it will save tens of billions of dollars through the base closing process may not be reliable, the General Accounting Office has concluded in a new report.
The Pentagon estimates it will save $14 billion through 2001 as a result of the base realignment and closure (BRAC) process. Beyond 2001, when the last of the four BRAC rounds currently authorized is completed, DoD expects to save $5.7 billion annually.
But DoD's BRAC savings estimates, GAO noted, do not take into account expected environmental costs beyond 2001 and financial assistance provided by federal agencies to BRAC-affected communities and individuals. Post-BRAC clean-up costs may exceed $2.4 billion and agencies such as the Labor Department and the Federal Aviation Administration have provided more than $1 billion in grants related to base closings.
GAO also found that the military services do not routinely update their savings estimates. The Air Force, for example, is still basing its reporting on its initial 1993 estimates, and the Army has not performed a comprehensive savings update. The estimates, however, are incorporated into DoD's five-year spending plans as prospective savings.
Still, GAO maintains that BRAC savings will be substantial. By 2001, four rounds of base closings will have reduced the domestic military base structure by about 20 percent from its 1988 level, according to the report. DoD has six years to complete all aspects of the BRACs that have currently been authorized, including clean-up of environmental contamination and transfer of unneeded base property to other users.
DoD is making progress toward cleaning up contamination at closed bases, GAO said. Through fiscal 1997, the Pentagon estimated it had spent $4.1 billion to bring excess property at BRAC bases up to environmental standards that must be met before property can be transferred. By the end of 2001, DoD will have spent an additional $3.1 billion.
The GAO report also examined the communities surrounding closed bases and found that most were doing well economically and showed improvement since the beginning of the closure process. As of 1997, 68 percent of those communities had average or lower unemployment rates than the rest of the country, compared with 60 percent in 1988. Incomes in 63 percent of the communities were growing faster than the national average from 1991 to 1995, up from 55 percent during the 1988-1991 period.
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