Monday, November 16, 2009

GovGuam left out by DoD

GovGuam left out by DoD

Monday, 16 November 2009 04:37
by Therese Hart | Variety News Staff

THE projected costs of multiyear, non-defense projects and programs that are needed to support the larger military presence as Guam prepares for the buildup is just a shot in the dark because the Department of Defense is not sharing information with the local government in a timely manner, according to a recent Government Accountability Office report released last Friday.

The cost estimates for planned off-base projects and programs varied because of project value, complexity and size, as well as whether the government hired independent consultants, and the extent to which DOD provided data to help set project requirements.

“As a result, the estimates prepared to date vary in quality and the overall costs to develop supporting off-base infrastructure are still uncertain.”

These off-base projects range from large, multiyear projects, such as improving Guam’s road network linking the commercial port to DOD’s bases, to small, local projects, such as expanding certain fire stations.

The report stated that in instances where DOD was involved in clarifying or providing update information on its buildup requirements and GovGuam used independent consultants to help develop and verify cost estimates, GAO found that GovGuam “developed cost estimates that may better reflect likely final requirements and may better justify investment decisions since they are informed by expert analysis and the most up-to-date planning information.”

For example, when the Department of Public Works estimated that $4.4 billion was needed to improve Guam’s road network, it did not have the benefit of DOD’s involvement.

However, after DOD provided further information to Guam DPW, the local agency was able to narrow the scope of the project from overall highway improvements to roadways directly affected by the buildup.

Guam had hired two consultants using funding from the Federal Highway Administration to develop cost estimates based on DOD’s input. As a result, GovGuam’s road projects costs estimate fell by nearly $3 billion to about $1.5 billion.

The government of Guam faces two key challenges in financing off-base infrastructure projects and programs required to support a larger military and civilian population.

First, the impact of Guam’s debt ceiling on the ability of the government to incur debt to help fund off-base projects and programs is uncertain, stated the report.

Second, GovGuam’s operating deficit will play a major role in determining its ability to borrow. However, the report did state that GovGuam has demonstrated that it can raise revenue by issuing bonds, and cited the June 2009 $473.5 million worth of bonds the government sold to pay for the cost of living allowance to recipients and to fund the building of a new landfill.

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