1 Base Realignment and Closure (BRAC) The Army’s Approach to Managing Resources 10 August 2005 Mr....

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Base Realignment and Closure (BRAC)

The Army’s Approach to Managing Resources

10 August 2005

Mr. Jeff GiangiuliVice President

CALIBRE

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Discussion

I. Definitions of BRAC Savings and Costs

II. Appropriation

III. Results of Past Rounds

IV. Management of Current Legacy

V. Expectations for Current BRAC 2005

VI. Concluding Thoughts

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BRAC Savings Defined

For Closing and Realigning Installations:

Total Cost ofInstallation Operations -

One-timeImplementation costs - Recurring costs at

Gaining Installations

Recurring costs at Enclaves

-

= Net BRAC Savings

Savings result from:• Civilian personnel reductions• Base Operations Support (BOS) cost reductions• Sustainment Restoration and Modernization (SRM) cost reductions• Reduced capital fund costs• Cancellation of budgeted Military Construction (MILCON) projects• Family Housing Operations cost reductions

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BRAC Costs Defined

• BRAC costs are the one-time, non-recurring costs that support the implementation of BRAC decisions.

• Costs are organized into 6 BRAC budget activities:BA1: MILCONBA2: Family HousingBA3: Operations and MaintenanceBA4: Military PersonnelBA5: Other ProcurementBA6: Environmental

• Part of Army Total Obligation Authority (TOA)

• Budgeted, Appropriated, and Executed as an OSD account

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COSTS

ONE-TIME (FY90-05)

BRAC 88 1,342BRAC 91 1,369BRAC 93 285BRAC 95 2,560

5,556

BRAC MAKES $ENSE ($M)

SAVINGS

FY90-05:

BRAC 88 3,317BRAC 91 3,612BRAC 93 613BRAC 95 2,229

9,771

ANNUAL RECURRING

BRAC 88 260BRAC 91 304BRAC 93 68BRAC 95 313

945

FY

90

FY

92

FY

94

FY

96

FY

98

FY

00

FY

02

FY

04

($1,000)

($500)

$0

$500

FY97 BreakEven Year

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ENVIRONMENT45%

MILCON31%

O&M / Other 24%

$2.5 Billion

$1.7 Billion

$1.3 Billion

BRAC 1988 – 1995 Program ExecutionTOTAL ARMY BRAC FUNDING FY 90-05

Total: $5.6B

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Program Optimization

Program Review Crosswalks (PRXs) and In-Process Reviews (IPRs):• Validates installations future year cost-to-complete (CTC) • Validates path to Remedy in Place/Response Complete (RIP/RC)

Environmental Services Cooperative Agreements (ESCAs):• Transfers both property and cleanup effort• Accelerates the disposition of “Hard to Move” BRAC property• Integrates cleanup and redevelopment to the benefit of local communities

Performance-Based Contracting:• Eliminates lengthy clean-ups• Demonstrates commitment to all stakeholders for cleanup of the property• Limits risk to Army of cost overruns

Resource Optimization

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Resource Optimization(Continued)

Fiscal Optimization

BRAC Action Scheduler (BRACAS):• Financial optimization model that evaluates savings options

based on the “scheduling” of various realignment and closure actions

• Critical to the efforts to “optimize” BRAC 2005 implementing actions to enhance BRAC savings

BRAC Optimization Model (BOM)• Financial model that takes into account environmental

regulations, legal agreements, key dates, and relative risk• Output removes slack and budget conflicts

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Army/BRAC Path Forward for FY05

• Finalize Last Four BRAC Rounds• Maximize Use of Performance-Based Contracting• Maximize Use of ESCAs and Early Transfers• Review/Justify CTC• Track BRAC 2005 Costs and Savings• Link Environmental and Real Estate Stove Pipes• Accelerate Conveyance of Real Property

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“Expectation of GAO and Congress is to implement BRAC at the published cost and achieve and track expected

savings.

BRAC 2005Cost and Savings Audit Trail

TABSCOBRA

BRACBudget

POM/Budget

Actual/updates

Cost $ $ $ $Savings

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Control Costs

• Army (ACSIM) Lead GO Team

• 22 Installations

• Aug – Sept 05

• Review Senior Mission Commander Plans

• Reconcile COBRA Estimates with Developing Requirements

• Look at all options (e.g. Revitalize existing facilities, privatization)

• Employ Army Audit Agency (AAA) Teams

• Use Standard Designs (Site Adapt for local requirements)

• Use Commercial Specifications

• Centrally Manage Change Requests

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BRAC 2005 Savings MetricsResponse to GAO/Congressional Interest

• COBRA analysis establishes savings baseline• Implementing organizations develop savings estimates• BRACD/ARSTAF evaluate estimates against baseline

• Deviations accepted based on DFAS data (accounting records) or similar evidence of actual cost of operations

• Dispute issues audited by AAA• BRACD establishes BRAC 2005 savings budget baseline• Army G-8 programs BRAC 2005 savings by appropriation/organization• Army updates savings estimates annually based on actual execution

data• BRACD updates BRAC 2005 justification book to reflect savings

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• Savings a product of Manpower Efficiencies

• Achieved as we finish MILCON and relocations

• Achieved upon Closure and Realignment

• Majority available in FY08 – 11

• Track BRAC savings annually during POM build

• Additional Revenue from Land Sales

• Fair Market Value should reduce Federal and Public Benefit Conveyance property requests

• Rural Army properties are likely candidates for no-cost Economic Development Conveyances (EDCs)

Capture & Use of Savings

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Concluding Thoughts

• Management and control of resources associated with implementing BRAC actions is difficult because of economic, mission, infrastructure, environmental, and political issues. An aggressive and committed resource management approach is needed.

• Use of private sector and/or market forces has helped to “accelerate” some past BRAC actions that were otherwise “languishing”.

• What worked before should be built upon for implementation of the next round to minimize one-time costs, accelerate timelines, and maximize recurring savings – especially with respect to the “hard to move” properties.

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Contact Information

Mr. Jeff Giangiuli

Vice President

CALIBRE

Phone: 301-921-4445

Email: jeff.giangiuli@calibresys.com