Background The Legal Framework for Historic Preservation The NHPA requires federal agencies to establish historic preservation programs to ensure the ongoing identification and protection of historic properties. A historic property is any building, structure, object, site, or district listed on or eligible for inclusion in the National Register of Historic Places (National Register). To be eligible for the National Register, a property must meet certain criteria, such as being associated with the lives of significant people from the past or yielding important information about prehistory or history, among others. Generally, properties that have achieved significance within the past 50 years are not considered eligible for the National Register unless they are of exceptional importance. The NHPA also established the ACHP, which advises the President and Congress on matters relating to historic preservation. The ACHP also recommends measures to coordinate activities of federal, state, and local agencies and private institutions and individuals relating to historic preservation. The ACHP can review the relevant policies and programs of federal agencies and make recommendations to improve their effectiveness, coordination, and consistency. Section 106 of NHPA requires federal agencies, including DOD, to take into account the effects of their undertakings (hereinafter referred to as projects) on historic properties, and to afford the ACHP a reasonable opportunity to comment on any such projects on historic properties by a federal agency. Part 800 of title 36, Code of Federal Regulations, establishes procedures to define how DOD and other federal agencies should meet these statutory responsibilities and how to accommodate historic preservation concerns with the mission of the agency, including DOD. Historic preservation concerns are reviewed in consultation with officials from the agency in question and other parties with an interest in the effects of the proposed project on historic properties. The goal of this consultation is to identify historic properties potentially affected by the project, assess its effects, and seek ways to avoid, minimize, or mitigate any adverse effects on historic properties. State Historic Preservation Offices—each led by a State Historic Preservation Officer (SHPO)—advise and assist federal agencies, including DOD, in carrying out their Section 106 responsibilities, and ensure that historic properties are taken into consideration during in project planning. A more detailed description of the relationship between DOD and SHPOs is presented in appendix II. A programmatic agreement is a document that federal agencies can, in consultation with the ACHP, SHPO, and/or other parties, negotiate and execute when a planned project will or may adversely affect historic properties and sets out the measures the federal agency will implement to resolve those adverse effects. Agencies can use programmatic agreements to satisfy their Section 106 responsibilities in the following circumstances: when effects on historic properties are similar and repetitive or are multi-state or regional in scope, when effects on historic properties cannot be fully determined prior to approval of a project, when nonfederal parties are delegated major decision-making where routine management activities are undertaken at federal installations, facilities, or other land-management units, or when other circumstances warrant a departure from the normal Section 106 process. Section 110 of the NHPA requires federal agencies to establish a preservation program to protect, identify, evaluate, and nominate historic properties to the National Register. Section 110 also states that agencies must designate qualified preservation officers to lead their respective agencies’ efforts to adhere to the NHPA, among other requirements. Further, Executive Order 13287, Preserve America, instructs all executive branch departments and agencies to maximize efforts to integrate the policies, procedures, and practices of the executive order and the NHPA into their program activities to advance historic preservation objectives. Preserve America also instructed executive branch departments and agencies to assess the current status of their historic property inventories (including general condition and management needs) and directs agencies with real property management responsibilities to report on efforts to identify, protect, and use historic properties every 3 years. Roles and Responsibilities DOD Instruction 4715.16 set forth the framework for a department-wide program that focuses on the management of cultural resources, which include historic properties. According to DOD officials, as part of DOD’s program to preserve historic properties, each military department designates federal preservation officers to coordinate its own separate historic property programs. Each department has an office or division that handles cultural resources and historic preservation and has staff who are generally knowledgeable about NHPA and its requirements. The military departments also issue their own guidance that establishes policies on historic preservation and delineates responsibilities for cultural resources personnel at the service and installation level. Each military department also is responsible for ensuring that military installations with cultural resources under their purview prepare Integrated Cultural Resource Management Plans (ICRMPs). These plans should include an inventory of all known historic properties, an inventory of properties that may be eligible for listing on the National Register, and standard operating procedures covering certain maintenance aspects of historic properties. According to officials from the military departments, installations are responsible for setting up a process where all maintenance/work order requests are reviewed for further action. For example, the review process can take the form of a maintenance/work order request review board and typically includes the installation’s cultural resources manager or members of the cultural resources manager’s staff. If the maintenance/work order request involves a historic property, then additional steps are taken at the installation level to consult with the appropriate stakeholders. Once officials at an installation complete their evaluation of the potential impact a maintenance request/work order would have on a historic property, they consult with the SHPO on how to move forward with the proposed maintenance/work order, according to installation officials. A more detailed description of the review of maintenance/work order requests is presented in appendix III. DOD’s Use of Historic Properties DOD generally uses its historic properties in one of two ways—to support mission needs or to house service members and their families. Generally, after consultations with the SHPO, historic properties can be repurposed or renovated to fulfill current mission and housing needs. For example, a historic aircraft hangar could be converted into additional administrative space or historic homes could be renovated by a private housing partner to house service members and their families. Figure 1 is an example of how a historic property could be reused. DOD Has Identified and Evaluated Some Properties as Historic, but Opportunities Exist to Enhance DOD’s Efforts DOD Has Identified and Evaluated 60,000 Properties as Historic In October 2017, DOD reported that, of its approximately 375,000 properties on installations in the U.S. and its territories, it has identified and evaluated about 60,000 as historic and about 57,000 as not being historic. DOD has not yet evaluated the remaining roughly 258,000 properties for historic significance. Approximately 41,000 of these properties are greater than or equal to 50 years of age, according to DOD. DOD’s Cultural Resource Management Instruction requires DOD to conduct a survey of historic properties that includes the identification and evaluation of all cultural resources against the criteria of the National Register. According to ACHP officials, DOD does not routinely identify and evaluate every property under its purview for historic significance as those properties reach 50 years of age. Instead, DOD’s practice is to identify and evaluate property for historic significance as installations have an identified need for or a project planned for the property, according to both DOD and ACHP officials. Officials said that, generally, federal agencies do not have the funding to proactively identify and evaluate properties for historic significance. Rather, funding to identify and evaluate properties is included within a project’s funding; therefore, generally federal agencies cannot begin to identify and evaluate a property for historic significance until a project for that property is funded, according to officials from the ACHP. The initial process to identify, evaluate, and track real property, such as historic properties, occurs at the installation level. Installation officials are to record transactions; document new acquisitions, changes to existing facilities, and disposals; and collect information on the real property at each installation. Installation officials are then to enter this information into the corresponding military department or WHS real property data systems. The military departments and WHS use these databases to oversee and manage real property needs across DOD installations, such as how property is used to support the installations’ missions and how much to budget for required sustainment, restoration, or construction of real property. Figure 2 shows how data are intended to move from the installation level to the military department databases and then to the DOD-wide real property database, which DOD calls the “Real Property Assets Database (RPAD).” OSD requires that the military departments and WHS submit their real property inventories to be compiled into RPAD. DOD uses these data to provide information on its real property to Congress and other federal agencies, including the Office of Management and Budget and the General Services Administration, in order to assist in the oversight of federal real property. DOD Lacks Complete and Consistent Data on Historic Properties, but Is Planning Actions to Improve Data Quality We identified some gaps in data, as well as data discrepancies between the data reported at the installation level and the department level regarding historic properties for fiscal year 2017. For example, one of the 10 installations we visited could not generate a list of historic properties on the installation with corresponding data fields such as the facility condition, plant replacement value, and facility utilization rate. Officials at this installation told us they are working on a long-term project to update their data on historic properties. Additionally, data we collected from three of the 10 installations we visited were inconsistent with data in the installations’ respective military department-level databases. For instance: One installation had 150 more historic properties listed in its installation real property data than were listed in the corresponding military department database. The installation’s data also showed 114 fewer properties coded as “Not Yet Evaluated” for historic significance than did the military department’s database. Similarly, the data in the military department database showed twice the number of privatized homes than did the installation database. A second installation had 119 properties coded as “Not Yet Evaluated” for historic significance, but none with this designation in the data provided by the installation. The data provided by the installation also included 164 privatized homes, none of which were included in the military department database. Further, this installation had nine historic properties that were not included in the military department database but that were included in the installation data, as well as 26 historic properties that were included in the military department database but that were not included in the installation data. A third installation had fewer discrepancies, with two historic properties that were included in the installation data that were not in the military department database. The data in the military department database contained six assets that the installation data did not contain. There were also four discrepancies regarding privatized housing between the installation data and the military department database, with each database containing two entries the other did not include. We asked five installation cultural resource managers about these discrepancies, and they stated that the military department databases most likely had not been updated to reflect the correct installation numbers. In November 2018, we reported that RPAD contained inaccurate and incomplete data due to weaknesses in DOD’s processes for recording and reporting real property, including historic property. The military services lacked complete data regarding real property transactions as well physical inventories of real property, to include historic properties. We also found that the military services have not consistently recorded real property transactions (i.e., the acquisition of, change to, and disposal of real property assets) and the results of physical inventories of assets. Finally, we found that the military services have not corrected previously- identified discrepancies in their data systems, such as missing entries for utilization and facility condition and overdue asset reviews. We recommended that each of the services develop monitoring processes for recording all real property (including historic properties) information. We also recommended that the Under Secretary of Defense for Acquisition and Sustainment work in collaboration with the services to develop corrective action plans to remediate inconsistencies in the data. DOD concurred with these recommendations and identified actions it plans to take to implement them. Implementing these recommendations would help DOD ensure more accurate and complete information on properties of historic significance and prevent further data discrepancies. Also, more accurate and complete information on the identification and evaluation of properties would help installations, military departments, and WHS oversee and manage their real property needs, including informing decisions regarding how much to budget for required sustainment, restoration, or construction of real property. We will continue to monitor DOD’s progress in addressing these recommendations. DOD Has Limited Visibility of Privatized Military Housing That Could Be Historic DOD may transfer the responsibility to identify and evaluate homes for historic significance to the private developers. However, the military department officials we interviewed could not confirm that private developers were meeting those responsibilities. The military departments have flexibility in how they structure their privatized housing projects, but project structures share certain similarities. For a typical privatization project, a military department leases land to a developer for a 50-year term and conveys existing homes located on the leased land to the developer for the duration of the lease. Given the length of these lease agreements, homes may move beyond 50 years of age while being maintained by the private developer. Military department officials told us that when a lease or programmatic agreement is signed with a private developer, the responsibility to identify and evaluate homes for historic significance is generally transferred to the private developer. Navy and Marine Corps officials stated that, when the leases for privatized military homes were signed, a list of historic properties was provided to each private developer. According to Navy officials, those private developers are now responsible for identifying and evaluating privatized homes for historic significance once the lease is signed and the homes are transferred to the private developer. Similarly, Air Force officials stated that, prior to conveying homes to a private developer all homes encompassed in the lease agreement should have been identified and evaluated for historic significance by the Air Force. According to these officials, after the transfer of properties under the lease, the private developer is responsible for identifying and evaluating homes for historic significance. Army officials also stated that the responsibility to manage privatized homes and assess their historic value falls to the private developer. However, private developers at seven of the nine of installations we visited that had privatized historic military housing told us that they do not identify or evaluate additional homes for historic significance. The private developers at the remaining two installations said they hire a third- party to identify and evaluate homes on the installations for historic significance as they age. DOD’s instruction on the management of cultural resources directs the establishment of a process to identify and evaluate cultural resources for historic significance. The need to identify and evaluate privatized military homes for historic significance would arise if a new project were planned for homes that could be of historic significance. Officials from all three military departments told us that they have addressed the identification and evaluation process by formally transferring those responsibilities to the private developers through documents such as land-lease agreements, installations’ programmatic agreements, and installations’ ICRMPs. However, DOD guidance also states that because privatization creates a long-term governmental interest in privatized housing, it is essential that the military departments attentively monitor these privatization projects. Taking steps to ensure that installation personnel verify that private developers are identifying and evaluating privatized properties for historic significance, as appropriate, could help to ensure that private developers do not make renovations or repairs to properties that could compromise their historic nature. DOD Does Not Routinely Assess the Condition of Its Historic Properties or Ensure Personnel Have the Guidance and Training Needed to Preserve Them Some Installations Do Not Routinely Conduct Required Inventories of Historic Property to Help Ensure Its Preservation Under DOD Instruction 4165.14, once a historic property has been identified, installations are required to complete a review of the real property asset record every 3 years, including a physical inventory that assesses the condition of the property. According to DOD, these inventories are important for planning, analysis, and decision making. However, we found that these required inventories are not routinely being conducted at six of the 10 installations we visited for a variety of reasons. Specifically, cultural resource management officials at six of the 10 installations told us that the inventory was not conducted because they were unaware of the requirement or thought that updating their ICRMPs was sufficient to satisfy the inventory requirements. As previously noted, ICRMPs should include an inventory of all known historic properties, an inventory of properties that may be eligible for listing on the National Register, and standard operating procedures covering certain maintenance aspects of historic properties. Officials at one of the six installations reported that they believe it is a best practice to inventory their historic properties every 5 years if they have sufficient staff to do so. Officials at two installations stated that they do complete the required inventory every 3 years. Officials at the remaining two installations either did not provide any comment or said they were unsure of when the last inventory was completed. However, officials from all of the services’ headquarters reiterated to us that the requirement under DOD Instruction 4165.14 is to inventory historic properties every 3 years. They explained that this inventory is separate and distinct from the annual inventory required under the ICRMP process. For example, Air Force headquarters officials stated that the 3 year inventory should consist of a physical check of the condition of the buildings, while the annual inventory required as part of the ICRMP update is a process to update data, such as status codes, for newly evaluated buildings. Until the military departments clarify the existing 3 year inventory requirement, current and accurate information on the condition of historic properties will not be available. Such information would better position officials who manage these properties to make informed management, maintenance, and planning decisions. Lack of Guidance on Training Could Hamper Maintenance and Historic Preservation Efforts We found that misunderstandings about how to maintain historic properties have led, in some instances, to problems with the preservation of these properties at installations. Each of the 10 installations that we visited has an established process and procedures for reviewing and approving maintenance/work orders on historic properties. These processes and procedures, articulated in installations’ ICRMPs, vary by installation and are generally intended to assist in preserving historic properties. However, cultural resource managers at five of the 10 installations said that past maintenance or renovation projects on some of their installations’ historic buildings may have compromised the historic significance of those buildings. In some cases, for instance, maintenance was performed improperly by tenants of historic properties or by contractors, according to installation officials. At one installation we visited, an official said a tenant made changes to a historic building without undergoing the formal approval process at the installation, which includes informing the cultural resource manager of the proposed change. The official said the tenant added additional office space and equipment, such as computers and other systems, in an unused attic without updating the capacity of the electrical panels. As a result, the official said a fire started in the attic, causing extensive damage to the building. An official at another installation we visited told us a contractor pressure washed a historic property that ended up damaging the building. The official said the damage was not intentional, as the contractor did not realize that pressure washing would harm the property. Unit members also noted some instances in which they were told by maintenance personnel that problems the members had reported could not be fixed because of the historic nature of the properties. For instance: At a Marine Corps installation, unit members said that maintenance and facilities management staff ignored or improperly handled issues they raised in their historic buildings. For example, unit members told us that maintenance personnel erroneously informed them they could not replace the air filters or clean out the mold in the ceiling because their building was historic. At an Air Force installation, unit members told us their requests for upgraded electrical outlets and roof fixes were denied because maintenance personnel told them those changes could not be completed because of the historic nature of the building. According to unit members, the existing outlets were not suitable for work on the aircraft being maintained in the building and thus presented a safety risk. Moreover, unit members told us that, to deal with the roof leaks, they ultimately resorted to using buckets to catch water. At an Army installation, unit members told us that maintenance personnel informed them they could not address certain problems, such as leaks, because of the historic nature of the building. For example, unit members at this installation resorted to boarding up their building with plywood during storms to keep rainwater from affecting the secure facility in the basement of the historic building because maintenance division staff told them addressing the leaks was not their responsibility, due, in part, to the historic nature of the building. One reason these problems may have occurred is that the individuals involved were not properly informed or trained about how to conduct maintenance on historic buildings. At nine of the 10 installations we visited, unit members who work in historic buildings told us that, based on their experiences requesting repairs to historic buildings, they believed maintenance personnel did not know what maintenance could or could not be done to the historic buildings. Officials from these installations expressed concerns about training, including a lack of training, related to historic preservation and maintenance of historic properties. For example, maintenance officials at three of the 10 installations we visited stated that they do not receive training on the special requirements associated with maintaining historic buildings; and cultural resource managers from four of the 10 installations told us that more training for installation staff, particularly maintenance staff, on historic preservation requirements would be helpful. Furthermore, officials from two of the four SHPOs representing the states where we visited military installations said they believe that tenants and maintenance personnel at installations do not have the proper training to adhere to historic preservation requirements. Officials from the Office of the Under Secretary of Defense for Acquisition & Sustainment (OUSD(A&S)) also said they were aware of misunderstandings within the military communities about aspects of historic preservation. For example, these officials said there were misunderstandings among installation personnel, including between personnel from department of public works’ offices, environmental offices, installation planners, and cultural resource managers about their roles and responsibilities concerning historic preservation. The OUSD(A&S) is responsible for establishing cultural resource guidance, designating responsibilities, and providing procedures to implement DOD’s cultural resources program. DOD Instruction 4715.16 states that ICRMPs act as the instrument DOD uses to comply with the statutory management requirements of the NHPA. It is also DOD policy that cultural resources under DOD control are to be managed and maintained in a sustainable manner through a comprehensive program that considers the preservation of historic, archaeological, architectural, and cultural values; is mission supporting; and results in sound and responsible stewardship. In addition, the Standards for Internal Control in the Federal Government state that management should communicate quality information down and across reporting lines to enable personnel to perform key roles in achieving objectives, addressing risks, and supporting the internal control system. However, officials from each of the military departments stated that they do not have department-wide or service-wide guidance related to historic preservation training. Instead, the content and frequency of training is determined by the installations, according to military department officials. When we analyzed the installations’ ICRMPs, we found that responsibilities for providing cultural resources training or technical guidance, feedback, and comments to installation personnel regarding historic preservation generally lie with the installation cultural resource manager. Installation personnel rely on individual cultural resource managers and the individual installations’ ICRMPs to ensure that all personnel at an installation have the training they need. Without providing installations with DOD or military department-wide guidance on training related to historic preservation, there could be more instances of improper or incomplete maintenance of historic properties on installations. Conclusions According to the Advisory Council on Historic Preservation (ACHP), DOD is one of the most compliant federal agencies with regard to historic preservation requirements. DOD uses historic properties to support mission needs as well as to house military service members. Thus far, DOD has identified and evaluated 60,000 properties as historic. However, additional actions could enhance DOD’s efforts to identify, assess, and preserve historic properties. First, we recently made recommendations which DOD concurred with, to improve the quality of DOD’s real property data. Implementing the recommendations would help ensure that DOD has more accurate and complete information on properties of historic significance and prevent further data discrepancies. Second, taking steps to verify that private developers are identifying and evaluating privatized properties that could be historic would help mitigate the risk of developers making renovations to properties that could compromise their historic nature. Additionally, clarifying the requirement to inventory historic properties every 3 years to assess their condition would help ensure that DOD has the information it has identified as important for planning, analysis, and decision-making related to such properties. Further, establishing guidance on training for installation personnel would help ensure they possess the necessary knowledge to properly maintain historic properties on installations. Recommendations for Executive Action We are making a total of seven recommendations to DOD. The Secretary of the Navy should take steps to ensure that Navy and Marine Corps’ installation personnel verify that private developers are identifying and evaluating privatized properties for historic significance, as appropriate. (Recommendation 1) The Secretary of the Army should take steps to ensure that Army installation personnel verify that private developers are identifying and evaluating privatized properties for historic significance, as appropriate. (Recommendation 2) The Secretary of the Air Force should take steps to ensure that Air Force installation personnel verify that private developers are identifying and evaluating privatized properties for historic significance, as appropriate. (Recommendation 3) The Secretary of the Navy should clarify the requirement for Navy and Marine Corps’ installation personnel to conduct a physical inventory of historic properties every 3 years, including an assessment of each property’s condition to ensure that facilities that have been identified and evaluated as historic are inventoried. (Recommendation 4) The Secretary of the Army should clarify the requirement for Army installation personnel to conduct a physical inventory of historic properties every 3 years, including an assessment of each property’s condition to ensure that facilities that have been identified and evaluated as historic are inventoried. (Recommendation 5) The Secretary of the Air Force should clarify the requirement for Air Force installation personnel to conduct a physical inventory of historic properties every 3 years, including an assessment of each property’s condition to ensure that facilities that have been identified and evaluated as historic are inventoried. (Recommendation 6) The Secretary of Defense should ensure that the Under Secretary of Defense for Acquisition and Sustainment, in collaboration with the military departments, develop and disseminate department-wide or service-wide guidance, on training related to historic preservation to installation personnel, including information on roles and responsibilities. (Recommendation 7) Agency Comments We provided a draft of this report to DOD for review and comment. In written comments, DOD concurred with each of our recommendations. DOD’s comments are reprinted in their entirety in appendix IV. DOD also provided technical comments, which we incorporated as appropriate. We are sending copies of this report to the appropriate congressional committees and to the Acting Secretary of Defense; the Under Secretary of Defense for Acquisition and Sustainment; and Secretaries of the Departments of Air Force, Army and Navy, and the Director of Washington Headquarters Services. In addition, the report is available at no charge on the GAO website at http://www.gao.gov. If you or our staff have any questions about this report, please contact me, Elizabeth Field, at (202) 512-2775 or FieldE1@gao.gov. Contact points for our Offices of Congressional Relations and Public Affairs are listed on the last page of this report. GAO staff who made key contributions to this report are listed in appendix V. Appendix I: Scope and Methodology Senate Report 115-130, accompanying a bill for the Fiscal Year 2018 Military Construction, Veterans Affairs, and Related Agencies Appropriations Act, included a provision that GAO assess the historic properties in use on the Department of Defense’s (DOD) U.S. installations. This report assesses the extent to which (1) DOD identifies and evaluates properties for historic significance, including those that have been privatized, and (2) DOD assesses the condition of its historic properties and has guidance on the training of installation personnel maintaining and those working in historic properties. For both objectives, we reviewed relevant laws, regulations, executive orders, and DOD (including military service) guidance that govern efforts to identify, evaluate, manage, and maintain DOD’s historic properties. We interviewed officials from the Office of the Secretary of Defense (OSD) (the Office of the Under Secretary of Defense for Acquisition and Sustainment); Washington Headquarters Services (Facilities Services Directorate); the Army (Installation Management Command; Office of the Assistant Chief of Staff for Installation Management; Office of the Assistant Secretary of the Army for Installations, Energy and Environment; U.S. Army Corps of Engineers); the Navy (Office of the Assistant Secretary of the Navy for Energy, Installations, and Environment; Office of the Deputy Assistant Secretary of the Navy for Installations and Facilities; Office of the Chief of Naval Operations; Naval Facilities Engineering Command); the Marine Corps (Headquarters Marine Corps; Marine Corps Installations Command; Environmental Management Division); and the Air Force (Headquarters Air Force; Air Force Civil Engineer Center Installations Directorate). We reviewed DOD data, plans, and agreements, and compared DOD’s efforts to address criteria in the National Historic Preservation Act and DOD Instructions. Additionally, we met with officials from the Advisory Council on Historic Preservation and private developers, such as Balfour Beatty, Clark Realty Capital, Lendlease, Lincoln Military Housing, and Hunt Companies, to whom DOD has conveyed property under the Military Housing Privatization Initiative (MHPI). To gather detailed examples of DOD’s historic preservation efforts, we visited historic properties at a non- generalizable sample of 10 installations. We selected these installations by analyzing DOD’s fiscal year 2017 data on real property, limited our analysis to installations in the continental United States, and identified the number of buildings and structures (“properties”) in each state DOD reported as historic. We selected four states, California, Hawaii, Virginia, and Maryland, for reasons including the high concentration of historic properties in the state. To select installations in each state, we considered variation in military service representation, the number of historic properties at each installation, and geographic variation and proximity. During these visits, we interviewed officials representing environmental resource management, cultural resource management, and the department of public works, facilities management, along with privatized installation housing developers. Further, we met with relevant state stakeholders including State Historic Preservation officials in California, Hawaii, Maryland, and Virginia. We obtained documentary and testimonial evidence related to the identification, evaluation, management, and maintenance of historic properties. We also conducted semi-structured group discussions of those who work in historic properties. The results of our interviews and semi-structured group discussions are not generalizable to all DOD installations. To determine the extent to which DOD identifies and evaluates properties for historic significance, including homes that have been privatized, we reviewed prior GAO reports related to this issue, including a recent GAO report on DOD’s real property data, including historic properties. We also requested and reviewed data related to historic properties, for each installation that we visited, including data on: the facility condition, plant replacement value, and facility utilization rate, among other data fields. We reviewed and compared the data from the military departments and from these selected installations. As discussed in this report, we identified limitations of the reported data on historic properties that have been identified and evaluated by DOD. Further, we compared DOD’s efforts to ensure that privatized homes have been identified and evaluated for historic significance to guidelines in Department of Defense Instruction 4715.16, Cultural Resources Management, and Department of Defense Manual 4165.63, DOD Housing Management. We also obtained and assessed testimonial evidence about the process to identify and evaluate privatized homes for historic significance from officials from the military departments and private developers. To determine the extent to which DOD assesses the condition of its historic properties and has guidance on the training of installation personnel maintaining and working in historic properties, we conducted interviews with officials from within OSD, each military department and officials at the 10 installations we visited to identify efforts to manage and maintain historic properties. We also met with U.S. Army Corps of Engineers and DOD’s Washington Headquarters Services to further understand their roles in historic property maintenance. We interviewed major developers who have, under the Military Housing Privatization Initiative, leased military housing from DOD and analyzed the process that is used to manage and maintain historic properties. We compared DOD’s efforts to conduct inventories of historic properties to guidelines in Executive Order 13287, Preserve America, and DOD Instruction 4165.14, Real Property Inventory (RPI) and Forecasting. In addition, related to the maintenance of historic properties, we compared DOD’s efforts to guidelines in DOD Instruction 4715.16, Cultural Resources Management, and the Standards for Internal Control in the Federal Government. In addition, at the 10 installations we visited, we collected physical and documentary evidence of DOD’s management and maintenance practices at the installation level. We analyzed installation-level planning documents related to the management and maintenance of historic properties, specifically the installation Integrated Cultural Resource Management Plans (ICRMPs) of the installations we visited. The ICRMPs were from installations spread out across the country and represented all branches of the military. We analyzed the ICRMPs to determine if there were any common themes. We also reviewed a non-generalizable sample of 10 programmatic agreements—one provided by each installation we visited—to identify common themes. These themes cannot be generalized to all programmatic agreements. We conducted interviews with installation staff to understand their responsibilities for historic property management and maintenance. We interviewed state historic preservation officials to understand the relationship between installations and preservationists and efforts to preserve historic properties on installations. During our site visits to 10 installations, we conducted semi-structured group discussions with individuals who work in historic buildings to supplement our understanding of DOD’s compliance with required policy and guidance, as well as any impact working in historic properties has on DOD employees. We used the military department data that informed our site selection, and queried the data to generate a random list of properties DOD identifies as historic. We provided each installation we visited with a list of 20 randomly selected historic properties and requested the installation’s assistance in inviting unit members who work in these buildings to participate in a semi-structured group discussion. The participants of the semi-structured group discussions were asked to discuss their experiences working in historic buildings. The results of our semi-structured group discussions are not generalizable to all DOD installations. To conduct the analysis and summary of these discussion groups, we developed a record of analysis that listed the installations visited and overall topics posed to the unit discussion groups and assessed the extent to which unit members had similar or different experiences working in historic buildings. We identified themes that emerged for each discussion topic across these group discussions. We conducted this performance audit between March 2018 and June 2019, in accordance with generally accepted government auditing standards. Those standards require that we plan and perform the audit to obtain sufficient, appropriate evidence to provide a reasonable basis for our findings and conclusions based on our audit objectives. We believe that the evidence obtained provides a reasonable basis for our findings and conclusions based on our audit objectives. Appendix II: Department of Defense (DOD) Relationships with State Historic Preservation Officials Installation cultural resource managers we spoke to at all 10 installations we visited said that they cultivate and maintain active relationships with their state historic preservation office (SHPO) and regularly communicate with them on preservation issues affecting their installations. Five out of the 10 cultural resource managers noted that maintaining a good working relationship with their SHPO made the consultation process more efficient. Officials we interviewed for two of the four SHPOs stated that being involved early in the consultation process with installation officials is more efficient and makes historic preservation an easier process by enabling them to receive feedback on proposed projects on historic properties, approval of programmatic agreements, and concurrence on their Integrated Cultural Resource Management Plans (ICRMPs) in a timely manner. For example, DOD officials at one military installation said they were able to use non-historic materials during renovations on a historic property in place of more costly period-accurate materials because the agreement with that SHPO facilitated such a solution. According to officials at this installation, SHPOs generally prefer the use of period-accurate materials on historic properties when conducting repairs and renovations. The officials, however, stated that they began consultations with the SHPO early in the process and were able to reach agreement that the historic nature of the property would not be adversely affected if non-historic materials were used. See figure 3 below. Officials from two of the four SHPOs said that due to positive working relationships between the installation and the SHPO, a programmatic agreement has been put in place to help manage the installation’s historic properties. These programmatic agreements can be used to address routine maintenance activities for historic properties that can be carried out by the installation with no further consultation with the SHPO. In the four states that we visited, SHPO officials said they executed programmatic agreements with some installations that can save time and reduce the number of required consultation meetings. According to officials from two of the four SHPOs we interviewed, having programmatic agreements in place can increase the efficiency of the historic preservation process. Generally, these programmatic agreements can include the following: Standard operating procedures. Programmatic agreements can include a number of routine maintenance plans pre-approved by the SHPO (such as the replacement of historic windows, repairing leaking historic roofs, and painting historic buildings) that an installation cultural resource manager can then follow without having to go through the consultation process. Inventories of relevant properties. Programmatic agreements can include inventories of historic properties that are relevant to the agreement. Generally, the procedures outlined in the programmatic agreement would apply to all of the properties listed in the inventory. Dispute resolution and emergency plans. Programmatic agreements can also include dispute resolution mechanisms between parties to the agreement and contingency plans for the maintenance and repair of historic properties in the event on an emergency. DOD Instruction 4715.16 on cultural resource management states that installations should adapt and reuse existing structures at their installation before disposal, new construction, or leasing. Installations typically consult with the SHPO before renovation work can proceed on historic properties, but, according to officials at one installation, alternative solutions can be reached if there is a good working relationship. In the figure below, at one military installation we visited, a historic property formerly used by National Aeronautics and Space Administration (NASA) and now used by the installation is in the process of being renovated and converted into additional office space. The concrete dome was used to test the aerodynamics of some of NASA’s satellite and spaceship components and is being converted into a new conference room after the SHPO approved the installation’s plan. See figure 4 below. While all of the installation cultural resource managers we spoke to told us they regularly communicate with their SHPO and five of these cultural resource managers said that good working relationships with the SHPO made the consultation process more efficient, installation officials may still experience challenges when trying to address historic preservation concerns. For example, maintenance officials at four of the 10 installations expressed some concerns about a backlog of consultations due in part to the increased time that they felt it takes to conduct these consultations. According to these officials, consultation backlogs caused delays to maintenance projects on historic properties at their installations. Appendix III: DOD Installation Maintenance and Work Order Review Processes DOD officials from every military service stated that each installation has a process for reviewing maintenance requests and work orders, including those involving historic properties. These procedures, articulated in installations’ Integrated Cultural Resource Management Plans (ICRMPs), vary by installation. For example, at seven of the 10 installations we visited, the ICRMPs state that all maintenance requests and work orders are reviewed by a board (or other body of internal stakeholders) composed of maintenance personnel, cultural resources staff (including the cultural resources manager), and other installation personnel. Officials from the military departments said that these boards are responsible for, among other duties, regularly identifying maintenance requests and work orders that affect historic properties and ensuring that the proper steps are carried out before addressing a maintenance request. Decisions by the board, results of SHPO consultations, and programmatic agreement requirements are then, according to officials from the military departments, passed down to maintenance personnel before they begin work on the historic property. At two of the other installations we visited, the installations’ department of public works reviews all maintenance requests and work orders, and at the remaining installation, the cultural resources manager reviews them, according to installation officials. During our visits to the military installations, cultural resource managers from eight of the 10 installations stated that they play a role in their installation’s maintenance request/work order review process and that maintenance personnel are typically included in the process. For example, one installation we visited set up a work induction board composed of staff from the installation’s Environmental Security Division (which handles cultural resources), maintenance staff, and other internal stakeholders. The senior official within the Environmental Security Division at this installation said the board meets on a weekly basis to determine whether proposed projects (such as maintenance requests and work orders) will affect historic properties at the installation. If the project involves a historic property, the installation’s cultural resources manager becomes involved and determines the extent of the affect to the property’s historic nature. This senior official also told us that the board also checks in regularly on ongoing projects and monitors work being done on historic properties. Officials at another installation we visited said they treat any building that is aged 50 or older in their database as historic and the maintenance division sends every new project to their installation’s historic preservation division to ensure a review of potential impacts of the maintenance requests or work orders. Appendix IV: Comments from the Department of Defense Appendix V: GAO Contact and Staff Acknowledgments GAO Contact Acknowledgments In addition to the contact named above, Brian Lepore, Director (retired); Maria Storts, Assistant Director; Whitney Allen; Ronnie Bergman; Aaron Chua; Christopher Gezon; Alexandra Gonzalez; Lori Kmetz; Amie Lesser; Emily Martin; Natalia Peña; Clarice Ransom; Jodie Sandel; Monica Savoy; and John Van Schaik made key contributions to this report. Related GAO Products High-Risk Series: Substantial Efforts Needed to Achieve Greater Progress on High-Risk Areas. GAO-19-157SP. Washington, D.C.: March 6, 2019. Defense Real Property: DOD Needs to Take Additional Actions to Improve Management of Its Inventory Data. GAO-19-73. Washington, D.C.: November 13, 2018. Military Housing Privatization: DOD Should Take Steps to Improve Monitoring, Reporting, and Risk Assessment. GAO-18-218. Washington, D.C.: March 13, 2018. High-Risk Series: Progress on Many High-Risk Areas, While Substantial Efforts Needed on Others. GAO-17-317. Washington D.C.: February 15, 2017. Defense Infrastructure: More Accurate Data Would Allow DOD to Improve the Tracking, Management, and Security of Its Leased Facilities. GAO-16-101. Washington, D.C.: March 15, 2016. High-Risk Series: An Update. GAO-15-290. Washington D.C.: February 11, 2015. Federal Real Property: Improved Data Needed to Strategically Manage Historic Buildings, Address Multiple Challenges. GAO-13-35. Washington, D.C.: December 11, 2012. Defense Infrastructure: Military Services Lack Reliable Data on Historic Properties. GAO-01-437. Washington, D.C.: April 6, 2001.


Background The MIECHV program provides voluntary, evidence-based home visiting services for at-risk eligible families with children up to kindergarten entry. HRSA allocates MIECHV program formula grant funds to states based partly on the proportion of children under age 5 living in poverty in each state, among other factors. In fiscal year 2018, states received an average of $6.9 million in MIECHV program formula grant funding, ranging from $1.2 million provided to North Dakota to $21.4 million to California (see appendix I for a list of all states and their fiscal year 2016 through 2018 funding). Generally, the state’s public health or social services department is the lead agency that receives and administers the funds. States target MIECHV program resources to at-risk communities and have the flexibility to tailor the program to serve the specific needs of their communities. States are generally required to provide home visiting services using an HHS-approved evidence-based program model. Currently, HHS has determined through its Home Visiting Evidence of Effectiveness review that 18 evidence-based home visiting models meet HHS-established criteria for evidence of effectiveness, and are therefore eligible for MIECHV funding. States may select programs to implement from the models that have been approved by HHS, or states may choose to implement a home visiting service delivery model that qualifies as a promising approach, as defined in the statute. In MIECHV-funded home visiting programs, professionals meet regularly with families and provide services tailored to the families’ specific needs, such as teaching parenting skills, promoting early learning in the home, or conducting screenings and providing referrals to address caregiver depression, substance abuse, and family violence. According to HHS, the MIECHV program builds upon decades of scientific research showing that home visits by a nurse, social worker, or early childhood educator during pregnancy and early childhood have the potential to improve the lives of children and families. From fiscal years 2013 through 2018, the number of families served and number of home visits conducted nearly doubled (see table 1). The MIECHV program is the primary federal program focusing exclusively on evidence-based home visiting, according to HHS. However, in addition to administering the MIECHV program, states may have other home visiting programs that may be supported by funds from other federal programs, such as Temporary Assistance for Needy Families and the Maternal and Child Health Services Block Grant. These home visiting programs may provide services that differ from those provided under the MIECHV program. For example, states may provide home visiting services through these programs that use program models that are different from the MIECHV program models approved by HHS. The MOE requirement in the MIECHV program’s authorizing statute provides that funds provided to an eligible entity receiving a MIECHV grant “shall supplement, and not supplant, funds from other sources for early childhood home visitation programs or initiatives.” To demonstrate their compliance with this statutory requirement, states are required by HRSA to report in their annual grant applications their MOE spending for the prior fiscal year. HRSA provides guidance to states on how to report their MOE spending in the annual NOFOs. For example, since fiscal year 2013, the MOE guidance in the NOFOs generally has directed states to only report spending that meets the following criteria: paid for with state general funds, spent in the prior fiscal year on HHS approved evidence-based programs that include home visiting as a primary service delivery strategy, implemented in response to findings from the most current statewide needs assessment, and offered on a voluntary basis to pregnant women or caregivers of children from birth to kindergarten entry. Over time, HRSA has clarified the MOE guidance provided in the NOFOs to help address questions received from states, according to HRSA officials. We previously reported that certain grant design features affect the likelihood that states will use federal funds to supplement, rather than supplant (or replace), their own spending. One such design feature requires grant recipients to contribute their own funds in order to obtain grant funds. Requiring grant recipients to contribute their own funds can take the form of a match or MOE requirement. According to our prior report, matching grants typically contain either a single rate (e.g., 50 percent) or a range of rates (e.g., 50 to 80 percent) at which the federal government will match state spending on a particular program. An MOE requirement, in contrast, requires states to maintain existing levels of state spending on a particular program as a condition of receiving federal funds. Depending on the specific program and its MOE requirement, if a state did not previously spend any state funds on covered activities, then the state could be allowed to maintain MOE spending of $0. The MOE requirement is one of many MIECHV program requirements that HRSA is responsible for monitoring. HRSA also monitors MIECHV’s programmatic and technical requirements, such as evidence-based model implementation, policies and procedures, data collection, and organizational structure and capacity. HRSA also monitors fiscal and administrative requirements, such as those related to accounts payable and cash flow, accounting systems, and cost allocations. State-Reported Maintenance of Effort Spending Varied and HRSA Determined States Generally Met the Requirement From fiscal years 2016 through 2018, state-reported MOE spending varied from $0 to more than $25 million, according to our review of MIECHV program grant applications (see fig. 1). For example, 28 states reported MOE spending of $0 in fiscal year 2018. Most of the 23 states that reported MOE spending greater than $0 in fiscal year 2018 reported spending less than $3 million, while three states reported spending more than $9 million. See appendix II for each state’s reported MOE spending for fiscal years 2016 through 2018. State-reported MOE spending does not necessarily reflect all state spending on all home visiting services. When states report their prior year’s MOE spending on their MIECHV grant applications, they are only required to include home visiting spending if it meets the criteria specified by HRSA in the NOFO. In addition to reporting their MOE spending in grant applications, some states also noted that they spent funds on home visiting services that did not meet those criteria. In fiscal year 2017, for example, one state reported that it had spent funds on home visiting services for a non-evidence-based model (i.e., a model not approved by HHS), and the state also funded an evidence-based program with funds other than state general funds. However, the state did not include either in its reported MOE spending because that spending did not meet the criteria for MOE spending in the NOFO. An update to the MIECHV program’s MOE guidance in the NOFO for fiscal year 2018 further impacted some state reported MOE spending. The update clarified the MOE guidance, stating that states should only report MOE spending by the recipient entity administering the MIECHV grant, and not report spending by other state agencies. According to HRSA officials—because the states were now directed to exclude some previously reported home visiting spending—five states decreased their reported MOE spending to $0. In addition, three other states reported a decrease in their MOE spending ranging from about $1.2 million to about $9.3 million because of this change (see table 2). HRSA determined that states generally met the MIECHV program’s MOE requirement because there was no supplantation of federal funds, including in states that reported no MOE spending and those that reported decreased MOE spending from the prior fiscal year. States may be permitted to report $0 in MOE spending if the non-federal spending on home visiting does not meet the criteria in the MOE guidance in the NOFO. For example, if the state had not previously funded home visiting programs that met HRSA’s MOE criteria for the MIECHV program, then the state could maintain state spending of $0, according to HRSA officials. States may report MOE spending of $0 if state general funds were spent on a home visiting model that was not approved by HRSA, if the state supports an evidence-based home visiting program with funds other than state general funds, or if the state did not support a home visiting program prior to implementation of MIECHV. HRSA determined that state-reported year-to-year decreases in MOE spending did not constitute supplantation (or replacement) of state funds with federal funds, because as described more fully below, HRSA determined there were valid reasons for the decreased MOE spending, according to agency officials. Based on our analysis of grant applications, 15 states reported decreases in MOE spending from fiscal years 2016 through 2018 (see table 3). These decreases ranged from $75,000 to $71,539 in one state, and $25,207,294 to $0 in another state. According to HRSA officials, there were three different reasons why states might have reported a decrease in MOE spending compared to the prior year: 1. The state made a technical error in its MOE calculation that subsequently was corrected. For example, some states reported a decrease in MOE spending compared to the prior year because the state previously included erroneous funding sources, such as funding for a home visiting program that did not meet the MIECHV program’s MOE criteria. 2. Circumstances outside of the state agency’s control contributed to the state reporting decreased funding, such as when a state legislature authorized budget cuts that affected home visiting funding or failed to pass a budget. For example, according to HRSA officials, one state experienced state budget challenges in fiscal years 2016 and 2017, which resulted in decreased funding for some home visiting services. The officials said this funding would have been included in the state’s reported MOE spending and these budget reductions resulted in a reduction to the reported MOE spending from the prior year. 3. The clarification to the MOE guidance that HRSA made in the fiscal year 2018 NOFO limited the spending states should report, as previously discussed. HRSA Employs Several Methods to Monitor State Compliance with the MOE Requirement HRSA uses several methods to monitor the MIECHV program and the program’s MOE requirement is addressed to some extent as part of each, according to our review of HRSA grants monitoring documentation and interviews with HRSA officials. These monitoring methods include grant application reviews, site visits, and financial assessments, among others. The monitoring methods vary in terms of the extent to which the MOE requirement is specifically examined, who conducts the monitoring, and the frequency of monitoring (see table 4). The primary mechanism for monitoring the MIECHV program’s MOE requirement is the review of grant applications, according to HRSA officials. HRSA project officers review the MOE chart in states’ grant applications for 2 fiscal years to compare state reported MOE spending— actual non-federal expenditures—and determine if states maintained their level of spending (see table 5). If there is a missing MOE chart or potentially inaccurate MOE spending information, project officers work with states to resolve the issue. While HRSA primarily relies on its review of grant applications to monitor state compliance with the MIECHV program’s MOE requirement, the agency supplements these reviews with other monitoring techniques, and some of these techniques have identified issues with state-reported MOE spending. For example, operational site visits provide HRSA an opportunity to ask detailed questions about state-reported MOE spending and obtain supporting documentation. As a result of operational site visits, HRSA identified inaccurate state-reported MOE spending in some states. We reviewed four completed site visit reports from 2017—the most recently completed reports at the time of our review—and two of these reports had findings related to inaccurate state-reported MOE spending. For example, one site visit report noted that the state incorrectly included home visiting spending that did not use an evidence-based model in its reported MOE spending. HRSA also found some deficiencies with states’ reported MOE spending through the agency’s review of state single audits. According to HRSA officials, there were five state single audits with MIECHV MOE findings from fiscal years 2014 through 2017. We found that four of these audits identified deficiencies with how states monitored and accounted for their MOE spending. For example, one audit found that the state did not have internal controls in place to ensure that state spending met the minimum MOE requirement. In three of the four single audits that identified deficiencies, the state agencies concurred with the findings and prepared corrective action plans to address the deficiencies. As of June 2019, HRSA officials said they have taken steps, or are planning steps, to modify or provide additional guidance related to how the agency monitors the MOE requirement for the MIECHV program. Specifically: HRSA officials told us that beginning with the formula grant NOFO for fiscal year 2019, HRSA added an additional column to the MOE chart for states to provide the expenditures for the 2 years prior to the current fiscal year of the application. According to HRSA officials, this will streamline HRSA’s process to compare state-reported MOE spending across 2 prior fiscal years without having to go back to the previous year’s grant application. In February 2019, HRSA published an internal grants policy bulletin that specifically addressed MOE requirements and the agency’s monitoring of those requirements for all HRSA programs. HRSA is currently working on MIECHV program standard operating procedures that are intended to clarify staff monitoring roles and responsibilities across the agency. Completion of this resource is targeted for the end of fiscal year 2019. HRSA is also planning to add the MOE table to future MIECHV program Final Reports submitted by grantees, beginning with the fiscal year 2017 Final Report, which is due to HRSA in December 2019. According to officials, this will allow for a formal resubmission of MOE spending if there have been any changes since the submission of the most recent grant application. Agency Comments We provided a draft of this report to HHS for review and comment. HHS provided technical comments that we have incorporated in the report as appropriate. As agreed with your offices, unless you publicly announce the contents of this report earlier, we plan no further distribution until 30 days from the report date. At that time, we will send copies of this report to the appropriate congressional committees, the Secretary of the Department of Health and Human Services, and other interested parties. In addition, the report will be available at no charge on the GAO website at http://www.gao.gov. If you or your staff have any questions about this report, please contact me at (202) 512-7215 or larink@gao.gov. Contact points for our Offices of Congressional Relations and Public Affairs may be found on the last page of this report. GAO staff who made key contributions to this report are listed in appendix III. Appendix I: Maternal, Infant, and Early Childhood Home Visiting Formula Grant Funding Washington, D.C. Appendix II: State-Reported Maintenance of Effort Spending Appendix III: GAO Contact and Staff Acknowledgments GAO Contact Staff Acknowledgments In addition to the contact named above, Elizabeth Morrison (Assistant Director), Andrea Dawson (Analyst in Charge), David Reed, and Kelly Snow made key contributions to this report. In addition, key support was provided by Jennifer Cook, Sarah Cornetto, Thomas James, Jean McSween, Mimi Nguyen, Stacy Ouellette, Michelle Sager, Almeta Spencer, and Matthew Valenta.


Background The Marine Corps uses a fleet of 23 helicopters to support the President in the national capital region and when traveling in the continental United States and overseas. These aircraft have been in service for decades. In April 2002, the Navy began development of a replacement helicopter later identified as the VH-71 program. By 2009, schedule delays, performance issues, and a doubling of cost estimates, from $6.5 billion in 2005 to $13 billion in 2009, prompted the Navy to terminate the program. The need for a replacement helicopter remained, and by April 2012, the Office of the Secretary of Defense approved the Navy’s current acquisition approach. The Navy’s approach is based on the modification of an in-production aircraft to replace the legacy aircraft, by incorporating an executive cabin interior and unique mission equipment such as communications and mission systems, and limiting modifications to the aircraft to avoid a costly airworthiness recertification. In May 2014, the Navy awarded a fixed-price incentive (firm target) contract to Sikorsky Aircraft Corporation, a Lockheed Martin Company, for an Engineering and Manufacturing Development (EMD) phase. The contract includes options for production quantities. The VH-92A presidential helicopter is based on Sikorsky’s S-92A commercial helicopter. The fixed- price incentive contract includes a ceiling price of $1.3 billion that limits the maximum amount that the Navy may have to pay the contractor under the contract subject to other contract terms. The VH-92A is expected to provide improved performance, survivability, and communications capabilities, while offering increased passenger capacity when compared to the current helicopters. Sikorsky is taking S-92A aircraft from an active production line (at the Sikorsky plant in Coatesville, Pennsylvania) to a dedicated VH-92A modification facility for subsystem integration at its plant in Stratford, Connecticut. When the aircraft arrives from Coatesville, some components, such as circuit breaker panels, engines, and main and tail rotor blades are removed. After airframe modifications are done, the aircraft is then transferred to the Sikorsky facility in Owego, New York, where integration of the mission communications system, painting, and contractor-led testing, installation of the executive cabin interior, and the delivery of the aircraft will take place. See figure 1 for a depiction of modification of the commercial S-92A aircraft to the VH-92A presidential helicopter. The VH-92A development program includes delivery of two Engineering Development Model (EDM) test aircraft and four System Demonstration Test Article (SDTA) aircraft. The first flight of the first EDM aircraft took place in July 2017 and the second EDM aircraft’s first flight occurred in November 2017. The two EDM aircraft are currently undergoing government-led integrated testing, at Naval Air Station Patuxent River, Maryland, and were used to conduct an operational assessment in March 2019 to support a decision on whether to enter low-rate initial production. The four SDTA aircraft, now in the modification stages, are production representative aircraft being built under the development contract. These aircraft are to be used in the VH-92A’s initial operational test and evaluation, which is planned to begin in March 2020. The results of that testing will be used to inform a decision whether to enter full-rate production in 2021. These SDTA aircraft will be used to determine whether the VH-92A is operationally effective and suitable for its intended use. In July 2018, the Federal Aviation Administration certified the VH-92A EDM-1 aircraft and supporting documentation to allow delivery to the government under the contract. According to the program office, the first EDM VH-92A configured test aircraft arrived at Naval Air Station in Patuxent River, Maryland, to begin government-led performance testing. The program office explained that in December 2018, the contractor provided VH-92A EDM-2, the second development aircraft, to the Navy and it, too, is undergoing government testing. VH-92A Cost Estimates Are Decreasing While Program Manages Its Schedule and Performance Goals The VH-92A total program acquisition cost estimate has declined from $5.18 billion to $4.95 billion (then-year dollars)—since the program started in April 2014. Contractor officials attribute that the estimated decline in cost is due to stable requirements, a low number of design changes, and streamlined processes and reviews. The program has incurred delays of about 5 months to the start of its operational assessment due to parts shortages and early integration problems during product development. Program officials told us they have adjusted schedule milestones accordingly and now project that the VH-92A is on track to meet its key performance parameters, including providing a fully interoperable mission communications system (MCS) in time for initial operational test and evaluation in 2020. Cost Estimates Have Declined Due to Stable Requirements and Efficiency Gains The Navy continues to reduce its acquisition cost estimate for the VH-92A program. The total VH-92A program acquisition cost estimate has decreased $234 million or about 4.5 percent—from $5.18 billion to $4.95 billion (then-year dollars)—since the program started in April 2014. The total program acquisition unit costs have decreased by the same percentage. According to the program office, this decrease is comprised, in part, by reductions of approximately: $36 million for lower than expected inflation rates, $88 million for efficiencies gained during development, and $103 million for revised spare parts cost and equipment production list. A key factor in controlling total program acquisition cost has been performance requirements stability. The Navy has not added any key performance requirements to the fixed-price contract, thereby limiting cost growth. In addition, the Navy and the contractor have been able to limit the number of necessary design changes that require modifications to aircraft. These modifications are now being incorporated into the four production representative aircraft. The Navy is using an existing basic ordering agreement with Sikorsky, separate from the VH-92A contract, for two additional design changes that are not part of the baseline program. These changes are to allow for improved visibility from the aircraft’s forward door and the addition of a fifth multi-functional display in the cockpit (which is identical to the existing four displays) to improve situational awareness. The program office is working with the contractor to determine the best time to make these modifications to the aircraft in order to minimize the effect on the production schedule. The final costs are still being negotiated; however, the program office expects the cost of implementing these two engineering changes to be minimal relative to the program’s total acquisition cost. The Navy and contractor have also taken advantage of other cost saving measures including streamlining some work processes and revised testing approach for some components; they are also sharing secure facilities used in support of the current presidential helicopter. In addition, they eliminated activities deemed redundant to the Federal Aviation Administration VH-92A airworthiness certification and plan to use a streamlined reporting process for the March 2019 operational assessment. According to program officials, the VH-92A has also optimized its live fire test and evaluation program. The Program Is Operating within Its Original Approved Schedule Baseline, Despite Experiencing Some Delays in Development Overall, Sikorsky reported it had accomplished about 83.3 percent of development work, with the remainder to be completed by October 2020. As of February 2019, the contractor estimates it would have completed nearly all of its activities necessary to demonstrate performance specification compliance per the contract, by February 2019, and the Navy is now more than halfway through its ground and flight testing requirements needed to a support Milestone C, the decision point for entering into low-rate initial production. The program has addressed delays resulting from technical challenges and new discoveries during development by delaying the start dates for the operational assessment, the low-rate initial production decision, and initial operational test and evaluation by 5 months each. The milestone start dates still meet the baseline schedule thresholds. As we found in the past, part shortages and the integration and assembly effort taking longer than planned have all contributed to delays early in the development of the two engineering development model aircraft. The overall effect has been between 3 and 5 months of schedule delays. In addition, some work initially allocated to the contractor’s site will now be completed at the Naval Air Station, Patuxent River, Maryland. This is a result of the contractor’s inability to get some parts when needed to maintain the planned build schedule. According to the program office, the Navy has implemented a number of mitigation strategies to reduce the effect of the schedule slip, including leasing a commercial S-92A for pilot training, reducing the duration of some future activities, adjusting the program’s schedule, and reexamining and optimizing some work processes to maintain the approved program baseline schedule. We also found that the program’s integrated master schedule met the best practices for a reliable schedule compared against best practices criteria in the GAO Schedule Assessment Guide. The success of programs depend, in part, on having an integrated and reliable master schedule that defines when and how long work will occur and how each activity is related to the others. Such a schedule is necessary for government acquisition programs for many reasons. It provides not only a road map for systematic project execution but also the means by which to gauge progress, identify and resolve potential problems, and promote accountability at all levels of the program. An IMS provides a time sequence for the duration of a program’s activities and helps everyone understand both the dates for major milestones and the activities that drive the schedule. A program’s IMS is also a vehicle for developing a time-phased budget baseline. Moreover, it is an essential basis for managing tradeoffs between cost, schedule, and scope. Among other things, scheduling allows program management to decide between possible sequences of activities, determine the flexibility of the schedule according to available resources, predict the consequences of managerial action or inaction on events, and allocate contingency plans to mitigate risks. Our research has identified 10 best practices associated with effective schedule estimating that can be collapsed into 4 general characteristics (comprehensive, well-constructed, credible, and controlled) for sound schedule estimating. Overall, we found the program’s IMS fully met one and substantially met three of the four characteristics for sound schedule estimating. Table 2 provides a comparison of the planned timeframe for key events at development start to the current estimated schedule. The Navy’s operational assessment began in March 2019 and ended about 30 days later; this is nearly 2 months prior to the Milestone C review, which will authorize low-rate initial production. The contractor’s delivery of the first engineering development model aircraft to the government was about a month late. A Developmental Test and Evaluation official stated that this reduced the already short window of time between the end of development testing and start of the operational assessment. A Director, Operational Test and Evaluation official responsible for monitoring the program expressed concern that there is little time to address any new discoveries found during the operational assessment. The program office acknowledged that, while solutions to any newly discovered problems may not be ready to implement at the start of production, it expects to have enough information from government-led integrated testing and the operational assessment to move forward with the Milestone C decision. The Program Made Progress in Demonstrating Performance Goals through Planned Developmental Testing According to the contractor, by February 2019, its test program for the first two development aircraft will be nearly completed. In addition, as of December 2018, the government completed about 48 percent of its development ground and flight test points to support Milestone C but is slightly behind, as it had planned to complete about 57 percent at this time. Between August and December 2018, the program conducted three major test events—the Navy conducted 14 landings on the White House south lawn to assess approaches, departures, and operations in the landing zone. The Navy also installed MCS version 2.0 on the second EDM aircraft in support of the operational assessment and tested the ability to transport the VH-92A in a cargo plane. Figure 2 shows the status of government testing as of January 2019. Program Facing Development Challenges While the program has made progress, the VH-92A program continues to face development challenges that could affect Sikorsky’s ability to deliver fully capable aircraft prior to the start of initial operational test and evaluation. Those challenges include issues associated with the aircraft’s start procedures for the propulsion system, landing zone suitability, and the aircraft’s mission communications system interoperability with secure networks. According to the program office, the performance requirements associated with these challenges may not be fully achieved until after the low-rate initial production decision currently planned for June 2019, which may result in a need to retrofit already built aircraft. Below is additional information on each of those performance requirements. VH-92A aircraft start procedures: As we reported last year, the VH- 92A was pursuing technical improvements related to the S-92A propulsion system, which was not meeting a performance requirement. According to program officials, a previously identified solution is no longer being pursued. However, these officials stated that the program is continuing to assess current capabilities and both material and non-material solutions to any potential capability shortfalls. Testing to demonstrate aircraft performance against the requirement will be completed prior to the Milestone C review in June 2019. Design changes, if needed, will be coordinated with program stakeholders. Program risk for this performance requirement has not changed since our April 2018 report on the program. Landing zone suitability: The VH-92A operates in and out of a variety of restrictive and highly visible landing zones. The White House South Lawn is one of the most frequent locations utilized for helicopter operations in support of the President. As we reported last year, the program was not meeting a key system capability requirement to land the aircraft without adversely affecting landing zones (including the White House South Lawn). The program has still not fully met this requirement and its assessment of this risk has increased since our last report. According to program officials, Sikorsky expects to have a solution for this requirement by November 2020. Mission Communications System (MCS): The mission communications system is a subsystem of the VH-92A aircraft that provides on-board and off-board communications services for the pilots, passengers, and crew. Currently, the VH-92A program has experienced problems connecting the MCS to secure networks, presenting a new risk area for the program. According to program officials, the MCS cannot connect to required secure networks due to recent changes in security protocols. Design changes will be needed to permanently correct this problem. For the March 2019 operational assessment, the program plans to connect to existing networks that do not use the new security protocols. This allowed the operational assessment to proceed but will limit the scope of testing. The Navy plans to have a final fix by January 2020 that will then be incorporated into the four production representative helicopters built under the development contract. These changes have caused the Navy to delay the start of the VH-92 initial operational test and evaluation by 3 months, a delay that is still within the approved program baseline threshold, as discussed earlier. Agency Comments We provided a draft of this report to DOD for review and comment. DOD provided technical comments, which were incorporated as appropriate. We are sending copies of this report to the appropriate congressional committees, the Acting Secretary of Defense and the Secretary of the Navy. In addition, the report is available at no charge on the GAO website at http://www.gao.gov. If you or your staff have any questions about this report, please contact me at (202) 512-4841 or sullivanm@gao.gov. Contacts points for our Offices of Congressional Relations and Public Affairs may be found on the last page of this report. GAO staff who made key contributions to this report are listed in appendix l. Appendix l: GAO Contact and Staff Acknowledgments GAO Contact Staff Acknowledgments In addition to the contract above, Bruce H. Thomas, Assistant Director; Marvin E. Bonner; Bonita J. P. Oden: Peter Anderson, Juana S. Collymore, Danny C. Royer, and Marie Ahearn made key contributions to this report. Related GAO Products Presidential Helicopter: VH-92A Program Is Stable and Making Progress While Facing Challenges. GAO-18-359. Washington, D.C.: April 30, 2018. Defense Acquisitions: Assessments of Selected Weapon Programs. GAO-17-333SP. Washington, D.C.: March 30, 2017. Presidential Helicopter: Program Progressing Largely as Planned. GAO-16-395. Washington, D.C.: April 14, 2016. Presidential Helicopter Acquisition: Program Established Knowledge- Based Business Case and Entered System Development with Plans for Managing Challenges. GAO-15-392R.Washington, D.C.: April 14, 2015. Presidential Helicopter Acquisition: Update on Program’s Progress toward Development Start. GAO-14-358R. Washington, D.C.: April 10, 2014. Department of Defense’s Waiver of Competitive Prototyping Requirement for the VXX Presidential Helicopter Replacement Program. GAO-13-826R.Washington, D.C.: September 6, 2013. Presidential Helicopter Acquisition: Program Makes Progress in Balancing Requirements, Costs, and Schedule. GAO-13-257. Washington, D.C.: April 9, 2013. Presidential Helicopter Acquisition: Effort Delayed as DOD Adopts New Approach to Balance Requirements, Costs, and Schedule. GAO-12-381R. Washington, D.C.: February 27, 2012. Defense Acquisitions: Application of Lessons Learned and Best Practices in the Presidential Helicopter Program. GAO-11-380R. Washington, D.C.: March 25, 2011.