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DOD’s Reliance on Real Estate Consultants Captures Committee’s Interest

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  • May 5, 2011
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The Government Accountability Office (GAO) would review DOD’s use of consultants to support infrastructure initiatives and real estate transactions such as housing, lodging, enhanced use leasing, utility privatization and other public-private partnerships, under a provision in the report accompanying the portion of the fiscal year 2012 defense authorization bill approved Thursday by the House Armed Services’ Readiness Subcommittee.

As the complexity of these public-private transactions has increased over the past several years, so has the department’s use of consultants, according to the committee. As a consequence, the lawmakers said they were “concerned” about DOD employees’ preparedness to negotiate and implement the deals, the use and cost of contractor support, and the department’s oversight of its consultant workforce.

“Moreover, the acquisition, management and disposal of real property and related programs may involve inherently governmental functions, raising questions about whether they should be performed by qualified government employees,” according to the report.

GAO’s review, due March 30, 2012, would assess:

  • the extent to which DOD uses consultants to support infrastructure and real property programs, along with the cost;
  • how the department determines the level of involvement of consultants in support of negotiations for real estate deals or in the management of DOD’s real property programs;
  • the extent to which DOD’s oversight ensures that the level of contractor support is appropriate, expected results are realized and costs are minimized; and
  • how the department ensures that government employees are sufficiently trained to negotiate and implement infrastructure initiatives and oversee related contractor support.

On Base Energy Deals

A separate GAO report would look at the various mechanisms the department uses to partner with industry to obtain third-party financing to develop renewable energy projects, such as enhanced use leasing, energy savings performance contracts and power purchase agreements. The subcommittee said it was concerned that DOD project-level officials may not possess adequate information to effectively leverage an array of factors, including resource potential, federal and state incentives, payback periods, state regulations and other regulatory considerations.

The congressional watchdog agency’s review, due Feb. 29, 2012, would consider:

  • what types of funding approaches are used by DOD to develop renewable energy projects and purchase clean energy?
  • what are the benefits and risks of such approaches?
  • the degree to which DOD has used each of the funding mechanisms; and
  • the extent to which oversight mechanisms are being used to monitor these partnerships and ensure they are effective.

The measure approved by the Readiness Subcommittee will be considered by the full committee May 11.

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