Public-Private Projects Should Be Accounted for in BRAC Analysis, GAO Recommends

In a review of the impact of the growing number of privatization projects on military installations, the Government Accountability Office (GAO) concluded that future base closure rounds would benefit from the Defense Department providing more comprehensive information about the potential costs created when DOD terminates project agreements with the private sector.

The congressional watchdog agency found that the department likely would incur liabilities following a BRAC round for renewable energy and privatized utility projects on affected installations. In contrast, privatized housing, Army lodging and enhanced use leasing projects would not be expected to create a financial liability following a base closure because the military services would not expect to terminate those types of agreements.

GAO recommends that DOD take three actions:

  • modify the procedures in its BRAC “data call” to capture costs associated with public-private projects;
  • modify the Cost of Base Realignment Actions (COBRA) model so it can indicate that a potential liability may exist even if the amount cannot be estimated at the time of data entry; and
  • modify COBRA instructions for entering information on costs associated with public-private projects to ensure they are consistently captured and complete.

“With the federal government facing an extended period of fiscal constraint, collecting initial data on all potential costs — including those related to alternatively financed projects — and ensuring that decision makers are aware of the potential for costs even when complete data are not available will improve the information for decision makers during the BRAC process,” the report states.

DOD disagreed with the three recommendations, asserting that the BRAC statute requires the department to make BRAC recommendations on selection criteria in which military value is the primary consideration. The Pentagon also stated that adding these liabilities during the cost-estimating process is unnecessary since they will not be known at that time.

Dan Cohen
Dan Cohen
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