With $5.9 billion in stimulus package money ready to go, the Dept. of Defense unveiled an expenditure plan that adds up to big opportunities for small contractors. The DOD plan, which was released to Congress on March 20, outlines nearly 3,000 projects that cover a broad mix of new construction, renovations and facility upgrades at sites in all 50 states, the District of Columbia, Guam and Puerto Rico.
The plan includes $2.3 billion in work under the military construction program, with the vast majority dedicated to projects under $10 million. The plan focuses on family housing, troop housing and quality-of-life projects, such as child development centers. Another $3.4 billion is dedicated to facility sustainment, restoration and modernizat ion work, with a focus on green initiatives. The majority of those projects ring in at under $1 million each.
“It’s not great news for the big contractors,” says Patrick A. Burns, vice president in M.A. Mortenson Co.’s Alexandria, Va., offi ce. “The good news for the industry is that it is spread around the country and will put a lot of work in the hands of people in a lot of states.”
Rolling out so many projects within a short time frame is a daunting task for the various engineering arms of the military. But Capt. Rame Hemstreet, Naval Facilities Engineering Command deputy commander of operations in Washington, D.C., says NAVFAC, the Army Corps of Engineers and the Air Force Center of Engineering and the Environment (AFCEE) are ready to move.
“We had solicitations out before we had the authority to award anything,” Hemstreet says. “When we saw the possibility of the recovery act, we worked with the Navy and Marine Corps for months. We’re not starting from scratch. Most of these projects we’ve been cueing up for a few months.”
NAVFAC is expected to award several projects within the first week of the plan’s release and is scheduled to start nearly all of the projects by the end of the year.
The military will lean heavily on multiple-award contract mechanisms, which prequalify a pool of contractors that can quickly mobilize on projects, particularly for the initial batch of awards. “There are particular requirements in the recovery act for getting the money into the economy quickly, so [multiple award task order contracts] will be a prime tool for us,” Hemstreet says.
The Air Force will receive about $1.7 billion in recovery funds, which will go primarily for maintenance and repair projects. According to Air Force officials, the funding will enable 1,500 such projects valued at $1.1 billion as well as $260 million for Air Force military construction and housing. Michael Hawkins, a spokesman for the Air Force Center for Engineering and Environment, says most stimulus funding will go for existing projects. “That’s what will allow us to get the work done quickly,” he says.
Corps of Engineers offi cials deferred comment to the office of the Secretary of the Army, which did not return calls.
Many larger contractors hope to see these projects bundled together and let out as packages. John Barotti, senior vice president and federal account manager at Skanska USA Building, Rockville, Md., notes that the Corps, NAVFAC and AFCEE have reduced contract administration staff in recent years, which could make it difficult for them to expedite thousands of projects.
“The smart thing to do is bundle some of them to make the administrative work easier,” he says. “That distributes the work a lot better and lets a range of contractors bid on these.”
Hemstreet says he expects use of bundling will be limited under the current plan, in part because the projects are diverse and don’t match up well in packages. Cases in which he expects bundling to be used include installations of photovoltaic panels at multiple facilities, which could be let out as large multistate contracts.
To address staffing concerns, Hemstreet says NAVFAC is hiring more contracting officers, anticipating they will ease the added workload and ultimately replace a wave of officers who are expected to retire in coming years. In regions with high workloads, such as the mid-Atlantic and Southwest, he expects to bring on program managers for pre-award and post-award contract assistance.
Contractors bidding on projects will face a few new requirements under provisions of the recovery act. Among the core criteria, bidders will be required to show how they can “expedite the work and get the money into the economy as quickly as possible,” says Hemstreet. Prime and first-tier contractors selected for DOD work will need to report how many jobs were created or retained through their projects, a measure that will require more detailed contract administration.