Between 2010 and 2015, the U.S. defense budget was reduced from $721 billion to $637 billion, while funding for military construction decreased by 75 percent. Resourcing for buildings needed for training, administrative, and maintenance purposes for the U.S. Army will probably follow this declining trend over the next several years. How do we determine the best way to allocate diminishing funds for military construction? One powerful tool to use in finding a solution is economic analysis (EA), a method that allows planners to evaluate project alternatives and provides a process to identify the optimal solution. This article describes the fundamentals of EA and explains why it is important for engineer professionals to understand this effective tool.
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