Military Construction (MilCon)
Issue
The U.S. Army Corps of Engineers (USACE), faced with limited funding for military construction (MilCon) and charged with staying abreast of a rapidly transforming military, is favoring low initial cost construction. Durability and maintainability are being sacrificed, and the long-term implications of operating, repairing and prematurely replacing these facilities are very costly indeed. Modular and "stick" constructed buildings with 15- to 20-year service lives are being constructed where masonry facilities with 50-plus-year design should be an option. The downstream (life cycle) cost implications to the government are enormous.
Background
The Army, faced with a force structure transformation that is arguably more acute than the Navy's, has been hard at work developing MilCon requirements and practices to ensure that facilities and infrastructure keep pace. Ironically, the Army's "shrinking pains" from base realignments and closures actually require the construction of new or reconditioned housing and facilities that it just cannot afford. Pressure to save money is intense.
Consequently, the Army has embarked upon a policy of entrusting the construction, operation and maintenance of facilities that are supposed to last to civilian designers and contractors motivated to build cheaply. The problem is not so much shoddy construction - modular and stick construction is passable over its short life - as it is low durability, high maintenance, and premature replacement...all at high overall cost to the government. Industries such as masonry that have delivered to the military reliable, long-lasting facilities are being pushed aside in a rush to build quickly and cheaply.
Conversely, the Navy has taken a more long-term view in its choice of materials. For example, it its Gulf Coast post-Katrina rebuild era, the Navy is rebuilding with a broad range of durable materials, including masonry, while the Army is choosing to rely upon modular/stick construction.
Update
Life-Cycle Cost Language, favorable to MCAA, was included in both the House of Representatives Fiscal Year 2012 Military Construction-VA Appropriations bill and the Senate Fiscal Year 2012 Military Construction-VA Appropriations bill.
Language in the House Report to H.R. 2055 (Page 17 of the Report):
Facilities management, life-cycle costs, and construction method alternatives.—The Committee believes that the military construction program best serves both our military personnel and the taxpayers when projects are open to competitive bidding from contractors representing the widest possible range of construction methods. To that end, the Committee urges the Department of Defense and the execution agents for military construction, principally the Army Corps of Engineers and the Naval Facilities Engineering Command, to ensure that requests for proposals or qualifications do not arbitrarily foreclose, discourage, or privilege any type of construction method. The Committee continues to encourage a level playing field for both traditional construction methods and alternative methods such as permanent modular construction. The Committee also encourages DOD to evaluate the regular use of carbon fiber grid precast concrete technology in military construction projects.
The Committee believes that the best way to ensure a level playing field is to set and communicate clear standards and expectations regarding life-cycle cost management for military construction, backed by rigorous, objective analysis. The Committee understands that situations may arise in which objectives other than lifecycle cost may take precedence; for example, speed of construction may be a predominant concern in order to meet time-limited goals such as base realignments, force structure growth, new system beddown, or urgent operational needs. At the same time, the Committee is concerned by the recent report from the Government Accountability Office (GAO–10–436) indicating that varying service attitudes toward the life-cycle costs of different construction methods were based more on pre-formed opinions, personal experiences, and anecdotal evidence rather than quantitative information or analyses. The Committee therefore urges DOD and the services to conduct further research regarding comparative life-cycle costs for differing types of construction, establish clear goals and benchmarks, and ensure these standards are communicated to contracting officials. Until such an empirical basis is established, the Committee urges DOD and the services to carefully reconsider blanket use of any new life-cycle approaches that depart from prior, standard practices.
Language in the Senate Report to H.R. 2055 (Page 21 of Report):
The Committee strongly supports the Department’s efforts to incorporate green building technologies, such as solar, photovoltaic, and green roofs, into both its new construction program and in the renovation of existing buildings. DOD currently requires new construction to meet LEED Silver standards and/or the five principles of High Performance Sustainable buildings. To ensure that all U.S. products can be utilized in DOD building construction and major renovations, the Committee urges the Department to evaluate commercial energy-efficient technologies for applicability to DOD construction and to allow and encourage the use of all green building ratings or certification systems which have been developed in accordance with rules accredited by the American National Standards Institute [ANSI] and approved as an ANSI standard. The Committee also encourages the use of green building rating or certification systems that incorporate and document the use of Life Cycle Assessment in the evaluation of building materials.
Page 35 of Senate Report:
Life-cycle Costs in VA Purchasing.—The Committee is concerned that the VA is not adequately considering life-cycle costs when making purchasing decisions. Evaluating unit cost without considering differences in the useful life of the item to be purchased may be causing the VA to spend more than necessary over time due to increased maintenance and replacement costs. The Committee directs the VA to report to the Committees on Appropriations of both Houses of Congress no later than December 30, 2011, areas in which life-cycle costs are not evaluated as part of the competitive bidding process and an explanation as to why these costs are not considered.
On December 16, 2011 the House of Representatives passed, by a vote of 296-121, the Conference Report for H.R. 2055 which was constructed as the year end omnibus appropriations bill. The Military Construction and Veterans Affairs Bill was included in this year end bill.
The Conference Report passed the Senate on December 17, 2011 by a vote of 67-32 and was signed by President Barack Obama on December 23, 2011 and became Public Law 112-074.
The report language for the Conference Report included the following language which in turn means that both the House Report Language and Senate Report Language are included in the final bill:
Page 1 of Division H under Military Construction – Joint Statement
Matters Addressed by Only One Committee.--The language and allocations set forth in House Report 112-94 and Senate Report 112-29 should be complied with unless specifically addressed to the contrary in the conference agreement and this explanatory statement. Report language included by the House, which is not changed by the report of the Senate or this explanatory statement, and Senate report language, which is not changed by this explanatory statement, is approved by the Committees on Appropriations of both Houses of Congress. This explanatory statement, while repeating some report language for emphasis, does not intend to negate the language referred to above unless expressly provided herein. In cases where the House or the Senate has directed the submission of a report, such report is to be submitted to both Houses of Congress. House or Senate reporting requirements with deadlines prior to, or within 15 days after, enactment of the conference agreement shall be submitted no later than 60 days after enactment of this Act. All other reporting deadlines not changed by this explanatory statement are to be met.
The Conference Report which was signed into law also included the following language which MCAA lobbied on:
Page 13 of Division C under Office of Management and Budget – Joint Statement
In light of increased efforts to identify government-wide efficiencies and anticipate the cost of major infrastructure projects, the Committee instructs OMB to examine Circular A-94. The Committee expects OMB's review of Circular A-94 to include an examination of the potential to incorporate life-cycle cost analysis. Moreover, this analysis should be as accurate, complete and reflective of the real costs and lifespans of materials as possible, including the use of material-specific discount rates and maintenance scheduled cost. OMB is directed to report to the Committee within 180 days of enactment of this Act on the status of reviewing Circular A-94. OMB should include appropriate experts in the field of life-cycle cost analysis, as well as appropriate industry experts and research centers.
OMB Circular A-94, "Guidelines and Discount Rates for Benefit-Cost Analysis of Federal Programs"
Position
The masonry industry urges Congress to direct the Armed Services to incorporate life cycle cost and other durability considerations heavily into design and construction protocols. The present policy, particularly that of the Army Corps, of grossly undervalues life cycle cost and durability as criteria for awarding construction contracts. This policy is costing the government billions of dollars long-term.
