RUMSFELD

From coast to coast, towns and cities near military posts are nervously awaiting May 16. That’s the deadline for Defense Secretary Donald Rumsfeld to recommend which U.S. installations should be shut in the first round of base closures in a decade. Rumsfeld’s roster won’t be the last word, but whichever posts are shuttered, hundreds of millions of dollars of construction are likely to follow, if past closure rounds are any guide. Work will include environmental cleanup at closed bases plus new facilities at still-open posts to which personnel from shuttered installations will be transferred.

"We along with many other companies have been tracking this for quite a while," says an industry source. "We think there’ll be a lot of realignment activities at what some people call ‘gaining bases."

What worries Capitol Hill is the prospect of losing bases. "This is a classic ‘all politics are local’ issue, especially in the House," says Rep. James Walsh (R-N.Y.), military quality of life and Veterans Affairs appropriations subcommittee chairman. "So, yes, there’s a lot of angst."

At an April 7 hearing of Walsh’s panel, Dept. of Defense witnesses didn’t hint at which locations might be in danger. A March 2004 DOD report pegged its excess infrastructure capacity at 24% of its asset replacement value. But on March 29, Rumsfeld said past studies, which estimated excess capacity in the 20 to 25% range, predate the Bush administration. He said that "the fact that we’re bringing so many forces home from overseas reduces that number." Rumsfeld added that "it looks now like the actual number will be less than the lower end of that range; how much remains to be seen."

In the four previous rounds–1988, 1991, 1993 and 1995–97 major installations were shut. DOD said those rounds produced a $17-billion net saving through fiscal 2001 plus an annual recurring saving of approximately $7 billion.

DOD says some closed posts have been converted to other uses. The 2004 report cites three military air bases that are now commercial airfields. Other locations have become sites for industry or schools. But David Nash, president of BE&K Government Group, Birmingham, Ala., says some conversions took longer than expected, which increased security and maintenance costs. Nash, a retired admiral and former head of the Naval Facilities Engineering Command, thinks that this time DOD will "look for early turnover" of its installations, to get the locations onto the tax rolls.