Rear Adm. Greg Shear, retiring chief of the Naval Facilities Engineering Command, likely had a few sleepless nights in 2006 when he first took over the U.S. Navy’s construction and facilities management arm, worrying about how it would handle a then-record $9-billion building mission. But at least that would be the peak, he told Navy brass. Three years later, the NAVFAC program has grown nearly 80% to $16 billion and is reaching around the world. “So, I’m not a good prognosticator,” he says.
Changing military missions, new political priorities, global disasters and other contingencies have combined to test NAVFAC’s ability to procure and manage the design, construction and building operations needs of its key clients, the Navy, U.S. Marine Corps and others in the U.S. Defense Dept. While its work scope is still smaller than that of the U.S. Army Corps of Engineers, NAVFAC has had to expand and retrain a scaled-back military and civilian workforce to handle its contract management at a time of upheaval in the construction industry.
NAVFAC missions include base realignment and closure (BRAC) commitments, which are required to be completed by the end of fiscal 2011, building for an expanding Marine Corps and a major scale-up of base facilities for them and others in Guam. There are also new requirements to cut energy use and enhance building life spans as well as $2 billion in American Reinvestment and Recovery Act funding to contract out. Further, NAVFAC was sent to Haiti for emergency duty after the January earthquake.
Program growth comes as NAVFAC must manage longer lists of bidders, including many unschooled in government contracting. “It’s not uncommon for jobs that once saw five bidders to now see 50,” says Robert M. Griffin Jr., assistant NAVFAC commander for acquisitions. Even so, NAVFAC awarded 90% of its FY 2009 MILCON appropriations, Shear says, “with this market and this workload.”
NAVFAC officials and industry executives tout a nimble team better trained and more adept than their DOD counterparts both in the business intricacies of government construction contracting and in the technical nuances of facility design and life-cycle management. One NAVFAC contractor executive says that it’s easier to negotiate with someone who “understands the details.” Observers credit NAVFAC’s focus on integrating engineering and “acquisitions” expertise into the military regimen early on. “It’s part of basic training to provide all the tools needed to make decisions,” says Joseph Angell, a former Navy officer who is now DOD program manager for Raleigh, N.C., engineer VHB.
For NAVFAC, it’s about creating a new group of “smart buyers,” says Shear. The command has won authorization to add 300 new hires to its contracting staff, including talent newly available from hard-hit industry sectors. All are then sent to month-long “boot camps” to learn the ropes of defense acquisition. “We’re getting the best and brightest,” says Griffin.
Surge of Work
In an effort to better manage what officials term the workload “surge,” NAVFAC has expanded its view of project delivery, embracing design-build on up to 80% of its projects. “That’s paid off in multiple benefits,” says Joseph E. Gott, NAVFAC chief engineer. “Because we do it the same way, not only do our customers expect that but our A/E and construction partners recognize that as the same delivery platform. They don’t have to learn something new when they put a proposal together.”
Although design-build is an established delivery method for many standardized projects, NAVFAC had avoided its use on more complex facilities, such as hospitals. But with two major fast-tracked hospitals recently added to its mission, NAVFAC seized the opportunity to try the approach for the first time.
Under BRAC, the Army is closing the aging and much-criticized Walter Reed Army Medical Center in Washington, D.C., moving key functions to the National Naval Medical Center in Bethesda, Md. The result is a $1-billion program with a firm three-year schedule set to complete in August 2011. The design-build effort’s first phase is led by a Clark Construction Group and Balfour Beatty joint venture and the second phase by Whiting-Turner Contracting Co.
“You don’t have to get extremely hands-on with design-build projects, but we are a little more hands-on with hospital projects,” says Gott. “It’s been incredibly successful.” NAVFAC aims to take the lessons learned to the planned $563.1-million hospital at Camp Pendleton, a Marine base near San Diego. Three design-build teams have been short-listed for the project: Hensel Phelps, Clark/McCarthy and Balfour Beatty/Hunt/Kitchell. The award is expected by September. The project is part of a nearly $5-billion capital plan under way at the base.
“We think that the design-build tool is something our commanders in the medical world will learn to appreciate,” says Griffin. “It’s a primary tool we’ll continue to use.”
Given the growing need for wounded warrior care, military hospital projects have been under close scrutiny recently. An outside panel raised concerns that plans for the new Bethesda hospital did not meet those of a world-class facility. DOD estimates the total cost of meeting that standard at about $781 million. In March, Rep. Susan Davis (D-Calif.) introduced a bill that includes $400 million in new appropriations.
Scaling Up on Guam
Design-build is set to serve NAVFAC well in scaling up facilities on Guam to receive from their Okinawa base 8,000 U.S. Marines—and thousands more dependents and workers—under a treaty with Japan. The command...