PRESIDENT'S PERSPECTIVE BUDGET
Deferred Maintenance Could Swamp Budgets
Nearly everyone is familiar with the old adage, “An ounce of prevention is worth a pound of cure.” It is one of those universal and enduring truths that millions of us implicitly acknowledge when we get an annual physical, take our car in for its scheduled service or repair the roof on our house after a few shingles fall off after a storm.
But, for a multitude of reasons — none of them convincing or persuasive — we don’t practice this logical and simple concept when managing our defense infrastructure.
A report came out recently revealing that when it comes to facility and infrastructure management, the Air Force has had to accept a “patch and mend” strategy for the numerous installations it operates around the world. What could that mean? In essence, it means that the Air Force can’t apply preventative procedures to key facilities and infrastructure. Instead, it defers needed and predicted maintenance and repairs until things actually break or otherwise become unusable.
Why has the Air Force adopted this approach? I can assure you it is not because its leaders are unfamiliar with the concept of scheduled, preventative maintenance and repair. And it is not because they are unfamiliar with concepts such as performance-based logistics and predicted failure rates. It is simply because they do not have the funding needed to execute a preferred alternative approach. The result has been excess costs incurred when making repairs, and a decrease in availability while awaiting them.
A few examples have recently been reported in the defense media. At Malmstrom Air Force Base, Montana, a building floor collapsed forcing a six-month stoppage in the repair of important nuclear components. At Tinker Air Force Base, Oklahoma, an obsolete electrical sub-station exploded cutting off power to numerous depot buildings, and resulting in millions of dollars in repairs and lost productivity. In this business, “lost productivity” is a soft way of describing “lost operational capability.”
In simple terms, although the Air Force received all the money it asked for in the fiscal year 2016 budget for infrastructure and facilities maintenance, it did not have a sufficient topline allocation. As a group, the military services only requested about 80 percent of the funding they actually needed to perform necessary sustainment and infrastructure maintenance. This means that some 20 percent of needed maintenance is being deferred, which creates two interconnected problems.
First, such deferrals have a compounding effect, meaning the eventual costs of a repair, upgrade or replacement will be significantly more costly than had the problem been addressed according to a systematic schedule.
Second, this compounding effect ultimately means that a huge backlog develops across the entire inventory. For the Air Force, that backlog, by some estimates, has now reached $23 billion, a figure nearly 20 percent of the Air Force’s base budget and approaching the size of its annual procurement budget. For the Army, there are more than 5,000 facilities work orders that are unfulfilled because of insufficient funding.
A July 2015 Government Accountability Office report, “Facilities Modernization: DoD Guidance and Processes Reflect Leading Practices for Capital Planning,” took a deep dive into how such projects are funded. The department maintains a global real-property portfolio of more than 561,000 facilities valued at more than $879 billion, the report said. Getting a handle on what maintenance is needed to cover such a vast amount of holdings has been a problem for budget planners.
The office of the secretary of defense seems to have little visibility over the services’ needs. The Army, Air Force and Navy have their own methods and schedules to assess facility conditions that results “in facility-condition index data that lacked credibility as a measure of the quality of DoD’s facilities,” the report stated. The office of the undersecretary of defense for acquisition, technology and logistics issued a memorandum in September 2013 directing the adoption of a standardized process to assess the condition of each Defense Department facility by September 2018.
And insufficient funding is the indisputable source of the problem. In order to meet its current challenges and fund the existing force, the armed forces have to address certain expenses such as paying personnel costs, health care and funding the growing costs of ongoing operations. If the base sustainment and maintenance backlog grows, and further deferrals become unacceptable because of readiness implications, this inevitably means that funds will have to be diverted from the modernization accounts — procurement plus research and development — which are the only “discretionary” accounts a military service actually has. This creates a true dilemma: the more costly the deferred maintenance, the greater the fund diversion.
What this means, in actuality, is that the ability of the future force will be diminished because we have inadequately resourced the present force and recent past. And the culprit here is obvious: an inadequate defense topline that has been suppressed by sequestration and other resource limitations imposed by the budget agreements of the past four years.
This should stop. We simply must come to grips — across the nation and within the government — with the reality that we cannot continue to ask our military to be more places, accept more missions and assume greater risks, while their budgets are either flat or moving in the opposite direction. And if necessary facilities funds are not to be committed, then Congress needs to authorize a new Base Realignment and Closure round so that infrastructure that can’t be adequately funded is eliminated.
Short-changing the facilities account, and inviting a growing maintenance backlog that will be even more expensive to address two congressional terms from now, is truly shortsighted and self defeating. Many have spoken in the past of a growing disconnect between military resources and missions. This particular area may be the most pernicious example. Not only does it limit capabilities in one area, but its compounding impact inevitably limits capabilities in others.