The Pentagon’s Real Estate Challenge: Underutilized Facilities and the Push for Accountability

The Department of Defense (DOD) oversees one of the largest real estate portfolios in the federal government, with over 700,000 facilities valued at approximately $2.2 trillion. However, a recent Government Accountability Office (GAO) report reveals that DOD faces significant challenges in tracking, managing, and disposing of underutilized and excess real property. The findings indicate a lack of consistent reporting across military branches, leading to inefficiencies that ultimately cost taxpayers billions.

DOD has issued guidance to ensure accurate reporting of real property utilization, but the GAO found that the military services have failed to uniformly implement these policies. For example, the Air Force employs a standardized methodology to determine facility utilization, whereas the Navy and Marine Corps report average utilization rates across similar facilities, which obscures actual usage patterns. The Army, on the other hand, has reported an oversimplified metric where facilities are either 100% utilized or completely unused, ignoring partial use and creating an inaccurate picture of real estate needs.

Compounding these reporting inconsistencies are operational inefficiencies. Some installations have excess facilities in disrepair but lack the funding to demolish or repurpose them. Others maintain older or historic buildings that are no longer needed but require ongoing maintenance due to preservation laws. At Fort Bliss, for instance, officials are required to maintain historic buildings that remain vacant, diverting funds from critical infrastructure projects. Similarly, at Marine Corps Air Station Cherry Point, a closed dormitory building was still required to undergo expensive repairs after sustaining hurricane damage.

The financial impact of these inefficiencies is staggering. The DOD spends an average of $14.6 billion per year on new construction and $15.3 billion on maintenance and repairs. However, a $181.1 billion deferred-maintenance backlog suggests that many facilities are deteriorating faster than they can be maintained. Additionally, the report highlights that some installations continue using temporary relocatable structures, such as trailers, long past their intended service life due to delays in funding for permanent replacements.

Another major issue uncovered by the GAO is the difficulty installations face in optimizing real property to meet evolving mission needs. Some bases report an overabundance of office space due to changes in telework policies, while others struggle to find adequate space for emerging requirements. Despite DOD's efforts to implement space management tools and create "demolition banks" to offset new construction with the removal of older facilities, progress has been slow. Installation officials cited bureaucratic hurdles and funding constraints as primary obstacles.

To address these challenges, the GAO has made five key recommendations. It urges the DOD to hold military services accountable for following utilization reporting guidance and to implement risk-based assessments for real property management. The report also calls for the Army, Navy, Marine Corps, and Air Force to develop detailed policies on balancing sustainment, demolition, and new construction priorities. Without these measures, DOD risks continued inefficiencies, misallocated resources, and an inability to make data-driven decisions regarding its vast real estate holdings.

DOD has concurred with most of the GAO’s recommendations, though the Navy and Marine Corps expressed concerns about consolidating oversight under a single department. Despite this, the report makes it clear that unless DOD enforces stricter accountability and resource planning, the challenges of managing underutilized and excess real estate will persist.

The GAO report underscores the need for the DOD to optimize its real property portfolio to ensure mission readiness and fiscal responsibility. By improving oversight, standardizing reporting methods, and prioritizing demolition and repurposing efforts, the DOD can reduce waste and better allocate taxpayer dollars to pressing defense needs.

This article is based on findings from the GAO report DOD Real Property: Actions Needed to Improve Oversight of Underutilized and Excess Facilities (GAO-25-106132), authored by Alissa H. Czyz. While this summary provides key takeaways, it does not guarantee accuracy and does not constitute legal or financial advice.