Summary

As part of the 1993 round of base closures, the Navy recommended closing the Naval Undersea Warfare Center in Norfolk, Virginia and moving it to Newport, Rhode Island, to reduce excess capacity. Construction of the Center's new facility in Suffolk, Virginia, had begun nearly a year earlier and was nearing completion under a 20-year lease for a building built to the Center's specifications. The justification for the building was originally submitted in 1987, before base closure considerations and reduced Navy budgets. It was based on the detachment's planned growth and the desire to consolidate the detachment's existing leased spaces in the Norfolk area. GAO concludes that the Navy should not have entered into a long-term lease during a period of downsizing. If the Navy fails to find other occupants for the building, it could be forced to spend more than $24 million in lease costs over the course of the lease. In addition, the Navy spent more than $9 million on one-time relocation costs. Before signing the lease, the Navy had indications that the proposed facility might not be needed. As a result, GAO believes that options other than a long-term lease merited greater consideration. In GAO's view, the decision to build the Suffolk facility was questionable. GAO found no indication that other options were considered for acquiring space for a smaller detachment. GAO summarized this report in testimony before Congress; see: Navy Laboratories: Issues Concerning the Naval Undersea Warfare Center's Suffolk Facility, by Donna M. Heivilin, Director of Defense Management and NASA Issues, before the Senate Committee on Governmental Affairs. GAO/T-NSIAD-94-211, June 22, 1994 (seven pages).

GAO found that: (1) construction of the Suffolk facility began in March 1992 and was completed in May 1993; (2) the justification for the building was originally submitted in 1987 prior to base closure considerations and was based on the detachment's planned growth and the desire to consolidate leased spaces in the Norfolk area; (3) the Navy should not have entered into a long-term lease in a period of downsizing; (4) the Navy has incurred over $9 million in relocation costs and could unnecessarily spend up to $24.3 million in lease costs; (5) options other than a long-term lease should have been considered, since there were indications that the proposed facility might not be needed; and (6) there was no indication that the Navy considered other options, even after it became clear in 1991 that Navy downsizing and reorganization would affect the size of the NUWC/Norfolk detachment.