DOD Infrastructure Programs

DOD Infrastructure Programs
The Congressional Perspective
American Council of Engineering Companies
Lucian Niemeyer (Lucian@Niemeyergroup.com)
March 2015
Congressional Issues Affecting Engineering Companies
• Sequestration of Defense Budgets
• Forecast for Facility Investment Accounts
• Armed Forces Reductions
• Specter of BRAC Authorization
• Intergovernmental Support Agreements
• Public Private Initiatives
Sequestration of Defense Budgets
The Budget Control Act of 2011
• Mandates that the “base” Defense Budget will be sequestered to $499
billion in FY 2016 – Congress will not repeal.
• A $35 billion reduction over President’s Budget Request
Funds for Overseas Contingency Operations (OCO)
• Intended for combat operations in Afghanistan and elsewhere
• “Off-Budget” Emergency Supplemental Appropriations
• President Requested $51 Billion for DOD in FY16 – about $25 Billion
more than needed based on historical expenses in theater
• Congress will add another $38 Billion to OCO for DOD in FY16
• Intended to offset sequestration without raising non-security spending
Forecast of Facility Investment Accounts
Military Construction
• Good News - FY2016 Total DOD MILCON request of $8.4 Billion is $1.8 Billion
more than the FY15 enacted amount for MILCON of $6.6 Billion.
• Bad News – MILCON is subject to sequestration (about 10-15% cut)
• DOD projects MILCON to be flat through Future Years Defense Program (FYDP) unsequestered
• FY17 - $8.7 B; FY18 - $8.5 B; FY19 - $7.9 B; FY20 - $7.1 B
Facility Sustainment, Restoration, Modernization (FSRM)
• DOD continues to take risk in facility sustainment accounts
• The FY2016 DOD request of $10.8 billion is better than the FY15 enacted
amount of $9.0 billion, but well below the FY2014 amount of $13.3 Billion
• Congress may add small amounts back to FSRM in 2016, but still not
enough to meet goals for 90% of sustainment requirement
Armed Force Reductions
Army
• Currently 490,000 Active duty soldiers with an FY2016 President’s Budget request to
drop to 475,000.
• Army is planning for sequestration to require Army to drop to 420,000
• Will have a dramatic impact on installations and housing privatization
Navy/USMC
• Navy requires a 308 ship fleet to meet COCOM requirements
• Currently at 272 ships after Congressional rejection of cruiser/LPD retirements
• Competing pressures from sequestration and huge capital investments (Ohio
Class submarine replacement, aircraft carrier construction, next small surface
combatant) leaves future size of the fleet uncertain.
• Impact to shore infrastructure and facility investments
Air Force
• Trying to retire weapon systems – rejected by Congress
Specter of BRAC Authorization
Depends on the Positions of the “Big 4”
• HASC Chairman – No BRAC Until sequestration fixed and
force structure stabilized
• HASC RM – Supports BRAC and has drafted legislation
• SASC Chairman – Included in letter to the Budget
committee an endorsement of management reforms
“that could reduce or consolidate military headquarters,
commands and infrastructure.”
• SASC RM - Endorsed a need for a BRAC round in a hearing
on March 3 with Secretary Carter
Scorecard - That’s 2 for, 1 against, and 1 unknown who was
a primary BRAC advocate in 2001 for the 2005 round.
Spector of BRAC Authorization
Other Positions
• SASC Readiness Chair – “Even after acknowledging the shortcomings
of the 2005 round, the department continues to request the same
legislative framework…I remain opposed to BRAC and do not want
to give the department the open-ended authority to pursue another
BRAC round that has the potential to incur significant upfront costs”
• HASC Readiness Chair – Will propose again legislation for a BRAC
facility capacity analysis – this time with force structure assumptions
• OSD/Installations – Open to discussion on changes to legislation –
offered an overall cap on total BRAC implementation costs
• USAF – Updated estimate of 30% excess facilities (24% last year)
• Army – Even at 490,000 soldier end strength – 18% excess facilities
• Navy – “We’re good.”
Intergovernmental Support Agreements
Congress established Section 2336 of Title 10 USC in 2013
• Authorizes the military services to enter into agreement with a
State or local government to provide, receive, or share
installation-support services if the Secretary determines that
the agreement will serve the best interests of the department.
• Many defense communities are seeking agreements with DOD
for shared utility and infrastructure maintenance or operations.
• Potential for engineering companies to facilitate the
agreements
• Still considered a new authority as Services wrestle with
templates, level of effort, and applicability of Federal
Acquisition Regulations
Public Private Initiatives
Congress Continues to Provide Pilot Legislative Authorities for
certain programs
• Military Housing Privatization is transitioning to long-term
maintenance phase with pressure from proposed reductions in
the Base Allowance for Housing (BAH)
• Congress may expand legislation for utilities privatization to
incorporate stormwater and allow for system expansion
• DOD using Power Purchase Agreements to facilitate
construction of renewable energy sources – Congress may
redirect investments to on base energy resiliency
• Renewable energy goals may be reassessed by new Congress.
Renewed effort by industry and Congress to address OMB
scoring with updates to OMB Circular A-11
Questions?
Lucian Niemeyer
(Lucian@Niemeyergroup.com)
American Council of Engineering Companies
March 2015