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.