This “Transformation BRAC” cost almost $30 billion and resulted in a small proportion of the savings from the last round, but it allowed DOD to redistribute its forces within its infrastructure in a way that is extraordinarily difficult when one is not in the middle of a BRAC round. It was an opportunity that the department seized while budgets were high.
The Efficiency BRAC
The remaining recommendations made under BRAC 2005 paid back in less than seven years — even after experiencing cost growth. This second BRAC 2005 — the “Efficiency BRAC” — cost only $6 billion (out of $35 billion) with an annual payback of $3 billion (out of $4 billion). This part of BRAC 2005 paid for itself speedily and will rack up savings for the department in perpetuity. This part of BRAC 2005 was very similar to previous BRAC rounds and very similar to what we envision for BRAC 2015.
Returning to Congress’ concerns about the cost growth from the 2005 round, the department acknowledges it was real and significant. However, the key is where it showed up — largely part of the 2005 Transformation BRAC. Looking just at the 2005 Efficiency BRAC, however, while there was cost growth it was manageable and, in the end, the short payback and huge recurring savings have to be considered a success even after cost growth was calculated for this subset of recommendations.
In today’s environment, as we work to cobble together contingency plans on how to deal with the sequester over the long haul, a $6 billion investment that yields a $3 billion annual payback would be extraordinarily welcome. In today’s environment, we need an Efficiency BRAC.
Frank Kendall serves as the undersecretary for Defense for acquisition, technology and logistics.