BRAC 2005 Net Savings Revised Downward

Projected 20-year net savings from BRAC 2005 have decreased by about 72 percent, dropping from an estimated $35.6 billion in Fiscal 2005 to some $9.9 billion in Fiscal 2011, according to a recent Government Accountability Office report. Higher than expected BRAC-related construction costs are to blame. “Overall, military construction costs for the BRAC 2005 round increased 86 percent, from $13.2 billion estimated by the BRAC commission to $24.5 billion . . . while over the same time period, general inflation increased by 13.7 percent,” states the report’s summary. It notes, “In contrast, military construction costs for the four prior BRAC rounds combined amounted to less than $7 billion.” Of the BRAC commission’s 182 approved recommendations in 2005, 75—about 41 percent—are now expected to net a negative 20-year present value, states the summary, dated June 29. This means that the present value of future savings is less than the present value of up-front investment costs in those areas. (See also Killing BRAC.)