The Army National Guard (ARNG) has been forced by local and world events to substantially revise its military construction (MILCON) project delivery procedures as we enter the 21st Century. It became clear by the late 1990s that the ARNG had to anticipate and react to force restructuring and facility realignments under Base Realignment and Closure (BRAC), as well as continuous manpower shortages due to frequent force deployments in support of the Global War on Terrorism/Iraq and disaster relief efforts such as Hurricanes Katrina and Rita. In addition, unique MILCON funding issues — a high proportion of mission-driven Congressionally-added construction projects, Congressional requirements to quickly obligate (award a construction contract), and the requirement to obtain timely state matching funds — combined to condense project time schedules. It became very evident that traditional design-bid-build processes did not serve the ARNG well in today’s dynamic military environment.
Background
At the national level, the ARNG is a National Guard Bureau (NGB) organization that acts as the federal bureaucratic liaison between the states and the Department of the Army, the Secretary of the Army, the Secretary of Defense, and Congress. During peacetime, the 50 states, Guam, the Virgin Islands, Puerto Rico, and the District of Columbia each have an ARNG organization under the control of their respective governors. During periods of war or other national emergencies, the state and territory ARNG organizations may be federalized by the president. The NGB facility directorate, NGB-ARI, is responsible for the acquisition, distribution, and control of federal facility funds, both for construction and maintenance. The funds are distributed to the states and territories through cooperative funding agreements (a form of restrictive federal/state grant).
In the states and territories, the ARNG’s Construction and Facilities Management Office (CFMO) is responsible for the management of the federal/state construction funds, the acquisition of required state matching funds, and the execution of a full range of ARNG facility programs. The majority of ARNG construction projects are executed as state facility projects and the remainder are federal facility projects. Normally, the state facility programs are executed on state property using state contracts, and are under the control of state law and state officials.
The CFMO may also use a federal contracting agent to execute facility projects. This normally happens when the project is located on federal property, or in rare cases, on state property if the state legislature approves. In this case, the project would be executed under federal law and federal officials. Project management would follow a similar course as a state project.
ARNG’s national MILCON budget is routinely $300 to $400 million a year. The ARNG consistently has more than $1 billion of construction in programming, design, and ongoing construction “on the board” at all times. In the face of dwindling resources, a decaying national network of ARNG facilities, and the event-driven modernization of our nation’s armed forces, modern, cost-effective, and efficient facilities must be constructed in today’s dynamic military environment at a daunting pace. Projects not obligated in the year of Congressional appropriation would lose political credibility for the ARNG’s construction program. In addition, non-obligated projects result not only in reduced readiness posture and the loss of new ARNG facilities, but also in a loss of local economic development for the affected communities. Timely construction contract execution is critical. By the late 1990s, using traditional project delivery methods, the ARNG’s MILCON program was not meeting the challenge and the project obligation rate was in decline.
Concerned with the timely execution of the MILCON program, Senator John McCain led the effort by inserting into the Military Construction Appropriations Act of 1995 the requirement that Department of Defense agencies provide certification that a project can be executed within the fiscal year funds are appropriated. The certification guidance was expanded to require, as a minimum, a “parametric” cost estimate and project design schematic before a project can be included in the President’s budget. This project programming requirement drives the timing and development level of the project RFP, and was, in the author’s opinion, a major influence in the military’s decision to adopt design-build. Combining the McCain requirement with the Congressional authorization of design-build for federal construction contracts in 1991, and the state governments’ increasing use of design-build project delivery, it seemed that the obvious advantages of design-build (single source responsibility and rapid project obligation) might be the “just in time catalyst” needed for the ARNG’s construction program.
In the 1990s, the ARNG’s construction program was like most other government facility programs — all construction was accomplished by design-bid-build with various degrees of success. In the late 1990s, NGB authorized two design-build pilot projects. Both projects, a $3.2M armory addition/alterations, in Annapolis, Maryland, and a $6.5M headquarters armory in Guam, were successfully obligated, designed, and completed within budget and on schedule. Because of the demonstrated success of these two projects, in January 2003, the ARNG published a memorandum allowing the states and territories to execute design-build projects. Within a year the memorandum was followed by the revision of ARNG regulations codifying the design-build process in the ARNG’s facility program. Although the memorandum and revised regulations were a satisfying culmination of five years of dedicated effort to include design-build in the ARNG’s construction program, this early effort at codifying design-build contains elements of regulatory requirements of the traditional design-bid-build delivery system. Most notable are restrictions on the appropriate use and timing of design-build, the extreme project document development required after the project is under contract, and the requirement to justify (life cycle costing, etc.) project elements after the project cost has been established. In addition, by omission, the use of stipends, project betterments, and other contracting approaches have limited design-build contract options.
After the ARNG’s facility leadership and community was convinced that the design-build project delivery system would be of value and the process was established in early 2003, the next step was to present the process to personnel in the states and territories who would actually execute the projects. It should be noted that historically, the implementation phase of transitioning from a “low bid” environment to the “best value” design-build methodology has proved to be daunting. However, during 2003 the ARNG presented 32 hours of hands-on design-build instruction at the ARNG’s Facility University in Biloxi, MS. The specialized training was enthusiastically received by the facility community and the classes were filled to capacity.
The 2003 Biloxi training effort exhausted the ARNG’s resources and convinced the ARNG that the effort required outside help. To make a dramatic change in how NGB does business and keep facility programs abreast of today’s dynamic construction environment, NGB required help from outside the military community. The logical solution was to partner with a national organization whose business is to lead the industry both academically and in application. Early in 2003, the ARNG developed a training proposal with the Design Build Institute of America (DBIA) to provide tailored design-build training to the ARNG facility community. A training agreement was awarded to DBIA for training to be held at the Tennessee National Guard’s Volunteer Training Site, Smyrna, TN, in November 2003 and at the Hawaiian National Guard’s Regional Training Institute, Bellows Air Force Station, Waimanalo, HI, in December 2003. Both training seminars were successfully organized, well attended, and enthusiastically received. Each student was presented with a complete set of design-build training manuals and aids.
DBIA conducted two follow-on series of courses, at the ARNG’s 2004 CFMO University, Albuquerque, NM, and at the Colorado National Guard Armory in Denver, CO, during October, 2004. Additionally, during March 2005 DBIA provided training at the 2005 CFMO University in Albuquerque. From 2003 through 2005 DBIA provided more than 75 hours of design-build training to more than 150 students in the ARNG’s facility community.
With the bulk of the training to date focused on the “practitioner,” it became apparent that “owners” should have specialized training as well. To this end, NGB contracted this year with DBIA to provide training in areas that would make their staff (owners) more professional, competent, and knowledgeable project managers. In November 2005 NGB and DBIA will unveil the first half of the new “Owner Training” and will conclude the training in June, 2006.
Future NGB training will include not only the “Owner’s Training,” but will also focus on a new audience consisting of the contracting community. While ARNG architects, engineers and support staff have participated in the training to date, the contracting officers and specialists also must become an integral part of the team. This new initiative should educate the owners’ contracting team to “close the deal” and allow the entire design-build team to excel.
At the conclusion of this training, the ARNG owners’ team should possess the knowledge and skills of quality design-build team members and, without question, enhance the ARNG’s design-build project delivery process.
However, at both the national and state level, it has been difficult to translate the DBIA academic design-build model to the every-day construction process. A mountain of federal and state project requirements, entrenched project management mindsets, and command expectations has challenged NGB’s cadre of eager, young, well-trained design-build practitioners.
Adopting Design Build — The Pennsylvania Experience
It goes without saying that the State National Guard Organizations over the last 10 years have experienced historically unprecedented challenges in both local and world-wide commitment. One only needs to watch the evening news to get some idea of today’s pressure on your local National Guard. Responding to these challenges is both a rewarding and sometimes an all consuming effort for those involved in what has been traditionally been promoted as a part-time occupation.
The op-temp pace inside the Guard has forced the organization to con-tinually reinvent itself, both nationally and at the state level. This has been especially true in the facility construction arena. Where the rubber meets the road within the state Guard organizations, the normal business plans have changed dramatically. A very typical example in both sheer magnitude and complexity is the Pennsylvania’s Army National Guard’s (PAARNG) facility response to the fielding of the 56th Stryker Brigade Combat Team (SBCT).
In December 2000 the U.S. Army proposed a multi-year program to field the Stryker Brigade Combat Teams. The PAARNG was selected as the first and, at present. is the only Reserve component SBCT; all other Stryker units are active duty Army units. The SBCT is a rapidly deployable, agile, versatile, lethal, survivable, and sustainable method of troop transportation. It employs the latest technology and can take soldiers safely and accurately into a range of environments from war to humanitarian assistance.
The SBCT is organized around the Stryker — an eight-wheeled armored vehicle with some of the most advanced technology in the world. This technology allows troops on board the vehicle to update maps of regions around the world, place themselves digitally on the map, and differentiate themselves from the enemy. As the vehicle moves, the vehicle ICON on the map also moves. On the digital map, enemy positions and obstacles (mine fields, wire, or terrain) can be templated from within the vehicle in real-time. All levels of command will see the information at the same time, providing commanders and troops on the ground a good picture of what the changing battlefield actually looks like. The system also allows communication from unmanned aerial vehicles (UAVs) which will provide the on-board personnel a “bird’s-eye” view of the battlefield. The vehicle carries a nine-man infantry or engineer squad. It can be armed with a variety of weapons from the 50 caliber machine gun to a low silhouette turret mounted 105 mm. Although it is the centerpiece of the Brigade, the Stryker vehicle is a small part of the Brigade’s 308 vehicles and 3,717 soldiers. The entire Brigade is operationally deployable world-wide by air. This is exciting ‘stuff’ for your local part-time Guard.
The Stryker Brigade is by far the largest program fielded by the PAARNG in recent history. The U.S. Government will spend close to $1.5B on fielding the Pennsylvania Brigade, including more than $250M in military construction. Construction projects include readiness centers (RC), field maintenance shops (FMS), and training facilities, all scheduled to be built over a four year period. In Fiscal Year 2006, two RCs and two FMS projects are scheduled with a construction value of approximately $30M. In Fiscal Year 2007, eight RCs and three FMS projects are scheduled with a construction value of approximately $68M. In FY 2008, approximately 15 projects are scheduled with an estimated construction value of over $70M. The number and types of projects and final value for the 2008 and the out-year projects are yet to be determined. The projects are located throughout Pennsylvania, from Philadelphia to Erie.
In Pennsylvania, the CFMO is part of the Department of Military and Veterans Affairs (DMVA), which represents the ARNG at state level and has the responsibility to coordinate the projects with the Pennsylvania Department of General Services (DGS). DGS is the State agency responsible for project execution; they typically select and administer the contract for the design and construction process. Penn-sylvania’s organizational structure illustrates a common challenge for the ARNG. As in many states, the agency responsible for administering the design and construction and/or contracting process is outside of the ARNG organization and control. This interagency relationship can create additional management and training difficulties, especially when new processes such as design-build are implemented.
In the very early stage of this program, the DMVA realized that the Pennsylvania Stryker program involved a large number of construction projects to be executed in a short period of time, which would have totally overwhelmed the DMVA engineering staff. Many facilities were typical in design and function and could take full advantage of a performance based project delivery process. With the requirement to streamline the process, the DMVA Military Department and DGS recommended to the state government that the design-build process would be an ideal project delivery system. At the time of this decision, Pennsylvania law did not allow use of design-build for public projects. DMVA partnered with the Pennsylvania Highway Patrol to pursue special legislation to allow design-build project delivery exclusively for the two agencies. This special legislation was approved in 2001. The change greatly simplified the project delivery system by allowing the DMVA to use a single source project delivery system instead of Pennsylvania’s traditional multiple construction contracts for each project (architect, general, electrical, mechanical, and structural contracts). NOTE: Utilizing the Pennsylvania model, a number of other states are presently attempting to obtain state agency design-build authority based on workload or response to natural disasters.
Currently all the Fiscal Year 2006 and 2007 projects are in various stages of RFP development and all are beyond the conceptual stage. The Fiscal Year 2006 projects are on schedule to be awarded in May or June of 2006 and the Fiscal Year 2007 projects in October or November of 2006. Pennsylvania plans to start developing the RFP’s for the FY 08 projects during November of 2005.
The Pennsylvania ARNG used an easily recognizable selection process to select design professionals to develop the project RFP. Two firms – Michael Baker Corporation, Moon Township, PA, and STV, Inc., Douglassville, PA, were selected from an established federal indefinite delivery-indefinite quantity (IDIQ) contract to develop the project RFPs. The use of IDIQ contracts is common procedure throughout the ARNG organization.
Here the similarity to the design-build academic model or direct design-build ends. Throughout the ARNG, at both the state and federal level, there has understandably been a significant bureaucratic reluctance to transition from design-bid-build to design-build. This reluctance to “give up control” of the project is deeply rooted in years of regulatory and policy processes in both ARNG federal and state contracting procedures and in years of established controlling criteria and design review processes that have evolved into design and procedural absolutes.
Because of long established state and federal design criteria and facility space allowances, federal and state reviewers allow very little flexibility when it comes to the size and functionality of a facility. Added to the restrictive federal and state project management policies, OSD and the Department of the Army requires, as a minimum, parametric design (concept-level) project development before submitting MILCON projects to Congress for funding. The facility cost and basic design parameters are established long before the project design is initiated. In addition, many states require a project program to accompany any request for state matching funds. Again, this program is detailed and establishes the project’s character long before the project is thoroughly analyzed by a design-build team.
Lastly, ARNG federal and state contracting processes typically use contract templates that allow little or no room for variation. Agency contracting offices make it clear that all contract decisions are theirs. In the case of design-build, their decisions will directly reflect their experience with design-build contracting.
Keep in mind the policy and regulatory project development that occurs long before RFP development. The following example illustrates Pennsylvania’s and typical ARNG project RFP development; as you read you will realize that the RFP is now developed in significantly greater detail. After the RFP design consultant is selected, the design consultant is required to conduct a “Project Design Charette.” The charette includes representatives from the contracting agency (DGS on the state side or the U.S. Property and Fiscal Officer on the Federal side), the using agency (DMVA), and the end users – the soldiers who will eventually occupy and operate the facility. Products from the charette are conceptual design, conceptual design estimate, placement of the facility on the site, conceptual site development plans, and square foot analysis — design vs. square foot allowance.
In addition, the design consultant is required to conduct a site assessment to include technical and legal site information. They must locate and map existing facilities, contact and obtain written commitments for the various utility companies that will serve the facility, obtain the environmental permits, conduct a topographic survey, and perform geotechnical investigation of the soil conditions. Legal information requirements include obtaining land development agreements and zoning requirements, initiating highway occupancy permits to the Department of Transportation, and conducting and providing a code analysis for each specific municipality. To obtain these permits and land development agreements, the reviewing agencies typically want to see drawings that are beyond schematics. Because of this, DMVA required the design consultant to develop the civil/site design drawings to about 75 percent complete.
The above narrative shows the significant investigation and conceptual design effort entailed in producing an RFP in Pennsylvania. The selected design-build contractor will duplicate at least some of this effort in order to proceed with the project. However, the design-build contractor’s risk is reduced significantly by this process, so ARNG logic is that the cost of developing the RFP may be offset to some degree by reduced construction costs. This process is typical for most ARNG organizations.
Pennsylvania’s follow-on design-build team selection process is a typical two-step selection process. The ARNG does not use stipends or project betterments in their selection process.
Summary
The authors have spent considerable time describing Pennsylvania’s RFP development process because we feel it illustrates a significant weakness throughout the ARNG design-build program. The ARNG facility program reflects today’s dynamic military environment and is rich in construction projects that are suitable candidates for design-build project delivery. The ARNG has provided its facility and contracting staffs with an ongoing design-build education program that is second to none. The ARNG is shifting throughout the facility community from prescriptive to performance based specifications and to the use of best value contracting, major accomplishments in themselves. However, the ARNG’s approach to RFP development has in no way emerged from the shadow of design-bid-build. At best, the textbook description of the design-build variation that best describes Pennsylvania’s and is typical throughout the ARNG community is Preliminary Design/Design-Build. Although a recognized form of the design-build process, we think that many in the industry would say that the resulting project bridging compromises much of design-build’s inherit advantages.
On the other side, the federal and state military communities would point out that design-build’s speed to obligation and single point project responsibility are more than enough to justify its use in government contracting. Moreover, government programs are too large not to insure from funding to completion that both the scope and dollar amounts are adequate. However, the political price of failure is too high a risk to pass on to a design-build team. In addition, from Congress through OSD, State governments to State National Guard commands, the existing process builds strong project expectations. Again, the project risk of not satisfying these expectations is far too high to entrust to a design-build team. Lastly, the ARNG contracting community would point out that their collective contracting experience exceeds even the largest design-build corporation. Beyond contract competence, legal constraints prohibit them from transferring contract risk to a design-build team. We think the collective military community, if asked, would be quick to point out that their collective experience of more than 200 years of providing military facilities makes them best qualified to provide project definitive designs.
The Debate Goes On
The authors are convinced that the project data developed before the RFP, the agencies’ regulatory and policy procedures, agency criteria, and state requirements can be collected and transmitted through the RFP to the design-build team without bridging or committing to a project pre-design. In the long run, the task is monumental, but will pay significant dividends in facility improvements in quality and functionality.
Colonel Donald R. Frankland retired from the Army after 32 years of service. His tours of duty included two stints in Vietnam as a combat engineer and four years in the Army Secretariat in the Office of the Deputy Director of Installations and Housing. He completed his service as the first military director of installations, National Guard Bureau. Currently, he is civilian director of construction, Maryland Army National Guard. He may be contacted at donald. frankland@us.army.mil.
Major Mark Austin, PA ARNG, is construction and facility manager for the Pennsylvania Army National Guard. The past three years he has worked full time as program manager for the SBCT MILCON Program, overseeing 30 projects with an estimated $200 million in dollar design and construction value. Prior to that he spent 12 years working for several large construction management firms in the Philadelphia, PA, area. He may be reached at c-maustin@ state.pa.us.
Charles E. Williams, Major General, U.S. Army Corps of Engineers (Retired), has had an exemplary engineering and construction management career, first in service to his country in the military and now as a civilian. General Williams is currently serving as Director and Chief Operating Officer in the Department of State’s Bureau of Over-seas Building Operations. In this capacity, he is responsible for managing the day-to-day activities of construction management, real estate, operations and maintenance, design and engi-neering, planning and programming, and budget management of over 15,000 facilities in multiple locations abroad.