Jan. 29, 2018 —
We determined whether the Navy and Marine Corps were properly managing and using relocatable buildings in accordance with appropriate Federal and DoD policies.
We initiated this audit to address concerns raised in Defense Hotline allegations.
DoD Instruction defines a relocatable building as a habitable prefabricated structure designed and constructed to be readily moved, erected, disassembled, stored, and reused. Furthermore, the DoD Instruction requires that relocatable buildings satisfy the interim facility requirement, which is short term, normally 5 years or less. Naval Instruction states that relocatable buildings are not energy efficient, require more maintenance than permanent facilities, and provide ill-suited working environments. Additionally, the Naval Instruction states that the use of relocatable buildings conflicts with congressional intent to avoid their use based on the added maintenance cost. The use of relocatable buildings is not an effective means of providing facilities for long-term needs.
We nonstatistically selected a sample of 159 Navy and Marine Corps facilities on several installations in the United States to determine whether they met the DoD Instruction definition and interim facility requirement of a relocatable building.
Navy and Marine Corps personnel are not properly managing and using relocatable buildings in accordance with appropriate Federal and DoD policies. Department of Public Works (DPW) personnel at Navy and Marine Corps installations have strategies in place to discontinue the use of 37 of the 45 relocatable buildings in our sample. Marine Corps DPW personnel obtained approval to acquire 38 of the 45 relocatable buildings before acquisition. In addition, Marine Corps DPW personnel obtained approval to use 29 of the 31 relocatable buildings in our sample beyond the 3-year limit established by Marine Corps guidance. However, DPW personnel at Navy and Marine Corps installations:
- did not obtain initial approval to acquire seven relocatable buildings because Navy tenant organizations acquired four relocatable buildings without the knowledge of the installations’ DPW, and Marine Corps DPW personnel found three relocatable buildings not previously accounted for when conducting a physical inventory of facilities.
- did not have strategies in place to discontinue the use and dispose of eight relocatable buildings. This occurred because Navy tenant organizations occupied two of the relocatable buildings. Marine Corps DPW personnel did not update the exit strategies for the other six relocatable buildings after original strategies changed.
- did not obtain a waiver to use 16 relocatable buildings beyond the 3-year limit. This occurred because 6 relocatable buildings were never approved and 10 waiver requests were never completed by DPW personnel.
- may not have appropriately leased 32 relocatable buildings because they did not perform a lease versus buy analysis before initially leasing or renewing the lease of the relocatable buildings to determine the most cost-effective way to obtain the buildings.
Furthermore, Marine Corps DPW personnel are using Defense Logistics Agency (DLA) Disposition Services personnel to dispose of excess relocatable buildings. Navy DPW personnel stated that they are not using DLA Disposition Services because of the distance from DLA Disposition Services facilities and condition of the relocatable buildings.
As a result, Navy and Marine Corps use of relocatable buildings to meet requirements may not be the most effective use of appropriated funds. Navy and Marine Corps personnel potentially misspent $1.8 million by leasing 32 of the 45 relocatable buildings in our sample, and then an additional $750,000 to acquire 31 of the 32 leased relocatable buildings. Also, because Navy DPW personnel are not using DLA Disposition Services to dispose of relocatable buildings, the DoD may be missing opportunities to reuse relocatable buildings in other locations or receive revenue from the sale of relocatable buildings for public use or scrap.
Moreover, Navy and Marine Corps DPW personnel incorrectly classified 114 of the 159 facilities in our sample as relocatable buildings because they did not meet the DoD Instruction definition, the interim facility requirement for a relocatable building, or both. This occurred because:
- the Office of the Assistant Secretary of Defense for Energy, Installations, and Environment (ASD[EI&E]) [formally known as Deputy Under Secretary of Defense (Energy, Installations, and Environment)], Navy, and Marine Corps officials issued vague guidance on the definition and classification of relocatable buildings that lacked illustrations and detailed descriptions;
- Navy and Marine Corps DPW personnel at seven sites did not apply the interim facility requirement when classifying relocatable buildings; and
- Marine Corps DPW personnel classified facilities as relocatable buildings in the Internet Navy Facility Assets Data Store system that did not meet the definition or the interim facility requirement of a relocatable building in order to track all facilities if fire and emergency response services are needed.
As a result, Navy and Marine Corps DPW personnel incorrectly reported the number of relocatable buildings to the ASD(EI&E), hindering DoD and Department of Navy personnel from accurately assessing space utilization and potentially circumventing the military construction process by using short-term requirements for long-term needs.
We recommend that the ASD(EI&E) update DoD Instruction 4165.56 to include details and illustrated examples on how to properly classify relocatable buildings.
We recommend that the Commander, Navy Installations Command, issue guidance to emphasize tenant organization personnel on Navy installations coordinate the acquisition of relocatable buildings with the installation’s DPW personnel, develop procedures to ensure their staff are disposing of excess relocatable buildings through DLA Disposition Services.
We recommend that the Commander of Naval Facilities Engineering Command and Chief of Engineers, Chief of Naval Operations, and Commandant of the Marine Corps revise Navy and Marine Corps guidance to reflect updates made to DoD Instruction, then train DPW personnel on the proper classification of relocatable buildings; and develop procedures to ensure DPW personnel properly apply the interim facility requirement when classifying relocatable buildings.
Additionally, we recommend that the Commandant of the Marine Corps revise guidance to separate non-relocatable buildings within the Internet Navy Facilities Assets Data Store system for tracking facilities if fire and emergency response services are needed.
We recommend that the Chiefs, DPW for Navy and Marine Corps installations, coordinate with the tenant and apply for approval of relocatable buildings that were never submitted; establish exit strategies; and request extensions for relocatable buildings that are past the established expiration date, or terminate the use of the relocatable buildings that are no longer needed. In addition, we recommend that the Chiefs develop procedures to ensure personnel are performing the required lease versus buy analysis.
Management Comments and Our Response
Comments from the ASD(EI&E), Navy, and the Marine Corps agreed with our findings and recommendations. We will close these recommendations upon completion and verification of the proposed corrective actions.
However, comments from the Commanding Officer for Naval Base San Diego did not address the specifics of the lease versus buy analysis recommendation. We request the Commander, Naval Facilities Engineering Command Southwest, Public Works Department Naval Base San Diego (formally known as Chief, Directorate of Public Works, Naval Base San Diego), provide additional comments detailing what steps will be taken to ensure this analysis will be completed for future relocatable buildings.
As a result of management comments, we redirected recommendations to the Commander of Naval Facilities Engineering Command and Chief of Engineers and the Chief of Naval Operations to revise Navy guidance to reflect updates made to DoD Instruction. We request the Commander of Naval Facilities Engineering Command and Chief of Engineers and the Chief of Naval Operations provide comments detailing what steps will be taken to ensure the recommendations are fully addressed.