Doing BRAC The Right Way

When it comes to downsizing its infrastructure, the Pentagon hasn’t learned any lessons. Obviously, neither has Congress. As part of its FY 2014 defense budget, the Pentagon requested another round of base closings starting in FY 2015. Four Washington think tanks recently agreed another round of closings was necessary to free up monies to help pay down future sequestrations. Naturally, Congress threw up at the idea, with the House and Senate Armed Services committees now denying that request.

As a senior former Pentagon budget analyst, I’ve been through all five rounds of Base Realignment and Closure (BRAC). Each service evaluates its facilities and properties for excess capacity, basing retention decisions on unique military requirements.

A major criticism, especially in the last round, has been that costs were understated and savings overstated. This basically happened because Congress does not restrain the Pentagon from inserting “we forgot about” emergent items or “we really need” to expand the scope of proposed projects. Just like its weapon development programs, the Pentagon can’t manage itself.

In the early 1990s, Congress authorized an assessment of DoD laboratories and test and evaluation facilities. Getting smarter, Congress directed a “BRAC with modernization” of retained facilities. Heading the budget team, I saw this assessment delayed two years so it could be rolled into BRAC 5.

Part of the cross-service capabilities assessment, the final recommendations were ignored, as the Pentagon wimped out, going “BRAC-lite.”

Four critical activities need to be addressed for the Pentagon to do BRAC right:

First, to bring integrity to the process, the BRAC commission itself should adjudicate the infrastructure requirements assessment process, not just approve Pentagon-submitted decisions. That allows the commission to act as a third-party between the Pentagon and Congress.

That body would conduct an everything-on-the-table assessment of similar capabilities across all services, consolidating capabilities and eliminating redundancies. Two infrastructure levels should be established: one at 80 percent of current force structure size and one for a 20 percent standby surge.

Instead of a “threaten everybody approach,” the commission would exercise a proper due diligence function then announce what bases it considers “core capabilities.” With key bases retained and local political resistance eliminated, removing excess capacity is easier.

Second, DoD really needs to get into the redevelopment business. Instead of leaving local communities to recover, this is an opportunity. Real estate development and construction companies should be brought into the process early. With government as an active partner, banks should be eager to help with financing.

Third, a combination of government and private facilities makes up the military-industrial base; the Pentagon must recognize a strong industrial sector underpins a strong military.

A separate BRAC assessment subgroup can map out key research, technology, production and testing capabilities of private partners. It’s also time DoD includes provisions about buying or subsidizing some critical industrial areas and capabilities during low production periods or gaps.

Fourth, overlaying this assessment should be a well-articulated and financed plan to modernize and sustain it. For bases and facilities defined as core, there should be a redevelopment/modernization component, using updated base master plans and private money.

Handling Navy/Marine Corps military construction and housing budgets for five years, I saw how construction and modernization follows a squeaky-wheel approach as every base competes its projects.

Instead, we should employ a privately financed “Whole Base Modernization” strategy to tackle infrastructure modernization in a coherent way. (DoD family housing privatization leveraged $2 billion in Pentagon dollars to gain $23 billion in private financing to fix almost 200,000 housing units.)

Like a mortgage, current construction, modernization and maintenance funds would pay down that initial financing. Efficiencies from a well-designed modernization plan would offset interest rate carrying charges, making it cost-neutral.

DoD estimates it has about $700 billion in infrastructure based on plant replacement value. That is unrealistic. A decent modernization program would cost about $100 billion a year for 10 years, then a proper sustainment program would cost maybe 20 percent of that investment.

So, while the Pentagon didn’t do its job, Congress, instead of not doing your job, give me a call. I’ll write the legislation to make sure we do it right this time.

John King is a retired Pentagon budget analyst and volunteer on the President’s National Commission on Fiscal Responsibility and Reform defense budget review team.

http://www.defensenews.com/article/20130620/DEFFEAT05/306200014