(Washington, DC)  --  U.S. Rep. Steven C. LaTourette (R-Concord Township) today sent a 16-page, fully-sourced letter to the BRAC Commission Chairman outlining in great detail why the planned consolidation of the Defense Finance and Accounting Service (DFAS) stands to be a colossal waste of taxpayer money, and amounts to nothing more than an ill-conceived and costly shell game.

 LaTourette sought and obtained information from the BRAC Commission that has not been publicly released.  It reveals exactly how much it will cost to close or realign every single DFAS facility nationwide, and also how much taxpayer money will be saved annually during the BRAC period (Fiscal Years 2006-11) and beyond.  The public BRAC Report only contained total costs and savings associated with the entire DFAS consolidation. 

 “This consolidation will really be nothing more than a tremendous job shuffle and the costs will be staggering,” LaTourette said. “Most taxpayers probably don’t know that DoD created 20 new DFAS offices across the country a decade ago, staffed them to their current level of more than 5,000, spent at least $173 million in taxpayer dollars to renovate the new offices, and now has decided that it is a wise use of taxpayer money to close them all.  What’s worse is that DoD knew all along that the 20 offices weren’t needed.”

 LaTourette said DoD will have to spend $282 million to close 20 relatively new DFAS offices and realign four large accounting centers, including the Cleveland office.  DoD justifies the action by touting $120 million a year in the post-BRAC years (after FY 2011).  The Cleveland DFAS office, which has been called a “nerve center” of DoD’s financial operations, has operated in some capacity for six decades.  The office is the only DFAS office in the country trained to handle retired military pay.  It was also chosen last July as the site to process all reservist pay.

 “I can’t find any compelling justification, economic or otherwise, to effectively close the Cleveland DFAS office,” LaTourette said.  “Through direct job losses alone, Cleveland stands to lose nearly as many jobs in the BRAC process as the entire state of New York and stands to lose more net civilian jobs than the states of California or Florida.”

 LaTourette said he was shocked by how large the closing costs and realignment costs are compared to the projected savings.  LaTourette said he was also horrified that DoD wants taxpayers to pay nearly $160 million to close 20 new DFAS facilities that just opened a decade ago.  The last DFAS consolidation effort was the focus of two separate GAO reports:   DoD’s Planned Finance and Accounting Structure Is Larger and More Costly Than Necessary (September 1995); and DoD is opening Unneeded Finance and Accounting Offices (April 1996).

 LaTourette said DoD officials conceded a decade ago that only a “handful” of new accounting offices was warranted, but decided to open 20 anyway – most at former military installations that needed at least $173 million in renovations to bring them “up to par.”

 LaTourette said the proposed consolidation plan will move all DFAS operations to three facilities – in Columbus, OH, Denver, CO, and Indianapolis, IN.   Before the three sites gain jobs, however, they will lose many in a massive reshuffling of manpower.  LaTourette said the one time cost to realign the three offices will be about $77 million, according to information he obtained from BRAC officials.

 “It seems that DoD is hell-bent on throwing bad money after bad, and is promising scant savings in the big scheme of things long down the road,” LaTourette said.  “Ultimately, this consolidation will be judged by one simple measure of performance – Are our active duty military, reservists, National Guard and military retirees getting paid, and on time?  I think this consolidation is a recipe for disaster.”

 Among other things, LaTourette’s letter to the BRAC Commission notes:

• DoD wants to spend $9.2 million to close DFAS Norfolk, which has 314 employees. By doing so, DoD will save a paltry $9,000 in Fiscal Year 2006.
• DoD wants to spend more than $7 million to close DFAS Rock Island (IL) and will save just $19,000 a year in Fiscal Years 2006, 2007 and 2008.  Rock Island has 235 workers.
• DoD intends to spend more than $6 million to close DFAS Dayton, which has 230 employees, and NO SAVINGS will be achieved in Fiscal Years 2006, 2007 or 2008.
• DoD will spend more than $8 million to close DFAS Rome (NY), which has 290 employees, and NO SAVINGS will be achieved in Fiscal Years 2006, 2007 or 2008.
• DoD wants to spend nearly $17.3 million to close DFAS Kansas City, now one of the five large DFAS Centers (Cleveland, Kansas City, Columbus, Denver and Indianapolis.)  The closure will save NO money in Fiscal Year 2006, $217,000 in Fiscal Year 2007, and $160,000 in Fiscal Years 2008 and 2009.  Kansas City has 613 employees.
• DoD wants to spend nearly $6.4 million to close DFAS Limestone (ME) and will reap no savings in Fiscal Years 2006 or 2007 and just $443,000 in Fiscal Year 2008.  The Limestone facility has 241 employees.