Economic
Impact Tool
The Department of Defense (DoD)
has conducted several rounds of Base Realignment and Closures (BRAC) with the last round being conducted in 2005. Since
then the US Army has reduced its force size, which has created excess
infrastructure capacity on many Army installations. Due to budget constraints, DoD has asked Congress to authorize another round of BRAC. One of Congress' BRAC
criterion that must be considered is the economic impact of realignment or
closure actions on surrounding local communities. The Army must also consider
economic impact for any day-to-day stationing actions outside of a BRAC.
The Center for Army Analysis (CAA)
has extensive experience with stationing analyses from prior BRAC rounds. CAA has conducted
considerable analysis in the recent European Infrastructure Consolidation (EIC) effort. CAA developed tools
that were used for stationing analysis during BRAC
2005 and modified them for use in EIC. CAA recognizes that its stationing tools must be revised to
meet today's challenges and is conducting a focused multi-year effort to do so.
As a part of this effort, CAA initiated a project
with the George Mason University's Systems Engineering and Operations Research
department to develop an Economic Impact Tool (EIT)
to determine the economic impact of future stationing actions on surrounding
communities.
The purpose of this project was to develop an economic
impact tool (EIT) that will capture the impact of
realigning or closing Army installations on the surrounding community. This
paper will describe an economic impact analysis methodology that can be used to
estimate the economic impact of stationing actions on the community surrounding
an installation affected. The developed tool considered factors used to
estimate the impact on a local community due to a stationing action, and
accounted for differences due to the location of the installation.
CAA
has started to reinvigorate their stationing analysis capability to answer
tactical stationing decisions while preparing for a possible future Base
Realignment and Closure (BRAC) round. During BRAC 2005, the Department of Defense (DoD)
used a model to estimate the economic impact of stationing actions on
surrounding communities. DoD's
method accounted for the employment and population changes to a community as a
result of a stationing scenario. This tool utilized commercially-owned software
to determine the economic impact of a stationing decision on the local
community. Under this fiscally constrained environment, this may not remain an
acceptable methodology. Additionally the methodology could be improved to
provide more information when assessing the economic impact to a community. The
tool used in BRAC05 was never updated; as a result, CAA
initiated a project with the George Mason University's Systems Engineering and
Operations Research department to develop an updated EIT
that captured the impact of realigning or closing DoD
installations on the community surrounding the installations for use in future
stationing decisions. The economic impact tool developed accounted for
differences across Army Installations, considered multiple attributes of
economic impact, utilized authoritative databases, and included a documented
and verified methodology.
1.
Conduct a
literature review to review previous and current economic impact tools.
2.
Designate
the economic impact factors that will be used to determine the economic
impact of a stationing action.
3.
Discover
authoritative databases containing data relevant to economic impact factors.
4.
Determine
relationships between economic impact factors and installation population.
5.
Develop a
tool that will predict the economic impact of stationing actions on the
surrounding community using the designated factors.