ES, IG-98-022, Risks Associated with ARC's Acquisition of Military Family Housing

RISKS ASSOCIATED WITH ARC'S
ACQUISITION OF MILITARY FAMILY HOUSING
IG-98-022

Executive Summary

Background
Due to base realignment and closure decisions, Onizuka Air Station, California, is excessing 693 housing units near Ames Research Center (ARC). Some of this housing is immediately adjacent to ARC, and some is off-site about a half mile from ARC (see map in Appendix B). ARC plans to acquire the housing units for two reasons. First, ARC needs to maintain the adjacent housing as a noise buffer between the Center's wind tunnels and the surrounding community. Second, ARC management believes that the low-cost housing would both retain and attract military tenant organizations to defray the cost of maintaining and operating Moffett Federal Airfield (MFA). The ARC plan asserts that the housing operation adds no additional cost to ARC operations and was approved by NASA Headquarters.

Objectives
The overall objective of the audit was to evaluate the operational and financial benefits of acquiring the Onizuka Air Station housing units. Specifically, we determined:

whether acquiring the housing units will operationally benefit NASA or ARC,
the estimated financial benefit to NASA of acquiring the housing units, and
the legal and environmental issues that may affect the value of acquiring the housing units.

Additional details on the objectives, scope, and methodology are in Appendix A.

Results of Audit
ARC management believes that the housing units can be acquired at no cost and little risk to NASA. However, a cost-benefit study performed for the Navy that supports ARC's assertion that housing revenue will at least equal the operating costs does not fully identify and consider all costs associated with the housing. In addition, ARC has not resolved all legal and environmental issues associated with the housing. As a result, the planned housing acquisition and operation could incur additional operational costs for ARC and increase liability for NASA.
Leasing the housing operation to a military resident agency is a key element of ARC's plan. The resident agency will accept responsibility for activities in the housing areas and contract with a commercial property management firm to operate the housing. As of April 1998, ARC had not yet identified a military resident agency for the housing operation.

Recommendations
This report contains recommendations to help ARC:

ensure that the proposed military family housing operation incurs no cost for NASA and involves no use of Agency personnel, and
minimize NASA's exposure to potential tort and environmental liability from continuing the military family housing operation.

Management's Response
Management concurred with all recommendations and will take actions to prevent the use of NASA resources to operate the military family housing and to minimize the Agency's exposure to tort and environmental liability. We consider planned actions responsive to the intent of the recommendations.

Background	Due to base realignment and closure decisions, Onizuka Air Station, California, is excessing 693 housing units near Ames Research Center (ARC). Some of this housing is immediately adjacent to ARC, and some is off-site about a half mile from ARC (see map in Appendix B). ARC plans to acquire the housing units for two reasons. First, ARC needs to maintain the adjacent housing as a noise buffer between the Center's wind tunnels and the surrounding community. Second, ARC management believes that the low-cost housing would both retain and attract military tenant organizations to defray the cost of maintaining and operating Moffett Federal Airfield (MFA). The ARC plan asserts that the housing operation adds no additional cost to ARC operations and was approved by NASA Headquarters.
Objectives	The overall objective of the audit was to evaluate the operational and financial benefits of acquiring the Onizuka Air Station housing units. Specifically, we determined: whether acquiring the housing units will operationally benefit NASA or ARC, the estimated financial benefit to NASA of acquiring the housing units, and the legal and environmental issues that may affect the value of acquiring the housing units. Additional details on the objectives, scope, and methodology are in Appendix A.
Results of Audit	ARC management believes that the housing units can be acquired at no cost and little risk to NASA. However, a cost-benefit study performed for the Navy that supports ARC's assertion that housing revenue will at least equal the operating costs does not fully identify and consider all costs associated with the housing. In addition, ARC has not resolved all legal and environmental issues associated with the housing. As a result, the planned housing acquisition and operation could incur additional operational costs for ARC and increase liability for NASA. Leasing the housing operation to a military resident agency is a key element of ARC's plan. The resident agency will accept responsibility for activities in the housing areas and contract with a commercial property management firm to operate the housing. As of April 1998, ARC had not yet identified a military resident agency for the housing operation.
Recommendations	This report contains recommendations to help ARC: ensure that the proposed military family housing operation incurs no cost for NASA and involves no use of Agency personnel, and minimize NASA's exposure to potential tort and environmental liability from continuing the military family housing operation.
Management's Response	Management concurred with all recommendations and will take actions to prevent the use of NASA resources to operate the military family housing and to minimize the Agency's exposure to tort and environmental liability. We consider planned actions responsive to the intent of the recommendations.