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LCD-77-315 1 (1977-03-28)

handle is hein.gao/gaobaacbe0001 and id is 1 raw text is: DOCURIN! R2s982 01134 - [A105186-:1 Before Construction of Bilitary Projects: lore Economic Analyses Needed. 9-133316; LCD-77-315. artch 28, 1977. 14 pp. + 2 appendices (2 pp.). Report to Secretary# Department of Defense; by Fred J. Shafer, Director, Logistics and Communicatious Div. Issue Area: Facilities and aterial anagesent: Building# Euying. or Leasing Yederal Facilities and Equipment (706). Cu.-.tact: Logistics and 0omunications Div. Budget Function: National Defense: Defense-related activities (05). Organization Concerned: Departsat of the Aix Force; Depattment of the army; Department of the Navy. congressional Relevance: House Committee on Armed Services; Senate Committee on Armed Services. Department of Defense managers make important and complex investment decisions about propose4 military construction projects. Since resources are becoming scarcer and sore costly, it is essential that proposed projects be evaluated oL a consistent and systematic basis before decisions are made. The Deartmeat of Defense (DOD) generally requires an economic analysis for military construction proposals which involve a choice between two or more alternatives, and projects justified on the basis of military necessity are not exempt from the requirement to perform an ecoaoic analysis. Findings/Conc~z-_ius: Less than 12 peicent of the Army, Navy* and Air Fo:.ce projects proposed to the Congress in fiscal years 1976 and 1977 were evaluated by economic analyses. In fiscal year 1976, the 31 projects evaluated by economic analysis represented only $89 million of th* $2.5 billion Aray# Navy, and kir Force construction program. In ficcal year 1977, the 37 projects accounted for only $138 million of the $2 billion Army, Navy and Air Force construction prcjects. Although it is conceivable that certain projects may not have been susceptible to such analysis or that the cost of the analysis may have been greater than the potential benefits, it is believed that more than 12 percent of the constzuction projects should have been evaluated by economic analysis. In a wide variety of proposed p-ojects, DOD managers did not use economic analysis to evaluate potentially feasible alternatives. Of the 116 prcjec, files examined that did not contain economic analysis# 39 made no reference to economic analysis, and 50 indicated that economic analysis vas *not applicable without disclosing specific reasons. Recommendationr, The Secretary of Defense shoul?' requnre thz military serv.ces to identify whether a military construction project has been evaluated by economic analysis and, if not, the reasons such an analysis was not prepared. The Secretary should also direct his office to pexiodically oversee and evaluate the military services' efforts in carrying out the

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