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Grassley, Iowa and Illinois Delegation Request Analysis of BRAC Cost Estimates

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Date:
Location: Washington, DC


GRASSLEY, IOWA AND ILLINOIS DELEGATION REQUEST ANALYSIS OF BRAC COST ESTIMATES

Sen. Chuck Grassley said today that he is concerned that the cost estimates used for the Base Realignment and Closure (BRAC) process significantly underestimated the cost of the TACOM-Rock Island move to Warren, Mich. Grassley, along with Senators Tom Harkin of Iowa, Dick Durbin and Barack Obama of Illinois and Congressmen Jim Nussle of Iowa and Lane Evans of Illinois, today sent a letter to the Government Accountability Office asking for a complete analysis of military construction cost estimates used by the Defense Department during the most recent BRAC process.

"Something went wrong in the BRAC 05 process and we need to ensure that future BRAC rounds don't have the same mistakes. I don't know if it was an isolated mistake, a product of systemic error, or an intentional underestimation, but Congress relies on this information and it's critical that it be accurate," Grassley said. "It's important that Congress understand the true costs of BRAC 05, especially in a time of tight budgets and competing demands on military budgets."

Here is a copy of the letter.

May 19, 2006

The Honorable David M. Walker
Comptroller General of the United States
Government Accountability Office
441 G Street, NW
Washington, DC 20548

Dear Comptroller General Walker:

We respectfully request a report analyzing the cost estimates for military construction used by the Department of Defense during the previous Base Realignment and Closure (BRAC) process, which appear to have significantly underestimated the cost for many initiatives. In fact, the Army recently admitted at an Association of the US Army (AUSA) conference that the military construction estimates for 14 BRAC 05 initiatives had grown from a $3.0 billion estimate in the Army's COBRA analysis to $7.1 billion today. Miscalculation of these costs can have a tremendous impact on the policymaking process when the BRAC Commission and Congress review and make decisions on proposed BRAC initiatives relying on this data.

We have had personal experience with poor cost estimates that contributed to a bad decision in the BRAC 05 process. At a BRAC Commission hearing, community representatives from the Quad-Cites in Iowa and Illinois testified that a proposed move of TACOM - Rock Island to Warren, Michigan would cost over $100 million for military construction despite an initial COBRA estimate of only $24 million. The Army revised their estimate for construction to $40 million during the deliberations by the BRAC Commission. However, we now understand that the current Army military construction estimate for the TACOM - Rock Island move is over $106 million. While estimates are rarely exact, the discrepancy between the initial figure of $24 million and the current estimate of $106 million is large enough to distort a cost benefit analysis. Hopefully, a review will determine if this was an isolated mistake, a product of systemic error, or an intentional underestimation.

Quad-Cities community representatives also told the Commission that the Warren installation did not have enough build-able land to house the additional employees and the required parking. Not only was the Quad-Cities community's estimate for military construction far more accurate than the Army's COBRA estimate, but we now hear that the Army is looking into building an off-site parking garage with shuttle buses to the Warren offices, vindicating the Quad-Cities community's claims in that regard.

While we understand that the BRAC 05 decisions are now law, we believe it is imperative that the significantly underestimated DOD BRAC cost projections be thoroughly reviewed. A meticulous inquiry by your office is necessary to uncover what went wrong in the BRAC 05 process so any shortcomings can be corrected in future BRAC rounds, resulting in a more objective, realistic cost-data analysis, and uniformly sound decisions. Also, in a time of tight budgets and competing demands on military budgets, it is essential that Congress understand the true fiscal impact of BRAC 05 initiatives.

We greatly appreciate your attention to this request.

Sincerely,

Chuck Grassley
Tom Harkin
Dick Durbin
Barack Obama
Jim Nussle
Lane Evans

http://grassley.senate.gov/index.cfm?FuseAction=PressReleases.Detail&PressRelease_id=5069&Month=5&Year=2006

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