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Comparison of Metrics for Projects Completed in FY05 and FY09

GEN. VAN ANTWERP

ENR: How has the partnership between the Corps and the construction industry changed in the last decade?

Van Antwerp: We have always enjoyed a very good relationship with our industry partners. We have more than 36,000 employees worldwide and on any given day there are as many as 350,000 industry partners working with us to help us execute our mission.

Ten years ago we had more employees and a smaller program, so we are really leveraging our capability with private industry. This interdependent reality strengthens our partnerships at all levels. Effective partnerships and teaming are even more important today than they were in the past because we have transformed the way we do business. The majority of our military construction program is executed using the design-build delivery system, which by its very nature requires more collaboration with industry than the traditional design-bid-build delivery system. As well, most of our construction requirements are procured using the "best value" contractor selection process, which gives us the flexibility to consider non-price factors such as experience and past performance when making contract awards. So we don't necessarily make contract awards solely based on lowest price.

We routinely participate in Associated General Contractors (AGC), American Council of Engineering Companies (ACEC), Construction Management Association of America (CMAA), Construction Industry Institute (CII), and other national industry organization forums and conferences at local, regional and national levels to increase our awareness of challenges facing industry and to help shape our policies, processes and systems. For example, we have adopted some of the industry�s best practices into the Army MILCON Business process:

We are using design-build on a large percentage of our MILCON construction.

We are allowing construct types I thru V, as does the industry.

We have adopted the U.S. Green Building Council (USGBC) Leadership in Energy and Environmental Design (LEED) rating system.

The Army has started to measure risk in project execution through the Project Definition Rating Index (PDRI) concept developed by the Construction Industry Institute.

ENR: How big is the present MILCON workload, and how does it stand, overall, with respect to cost and schedule?

Van Antwerp: Fiscal2009 (1 Oct 2008 � 30 Sep 2009) was one of the largest military programs ever for the US Army Corps of Engineers. With nearly $3 billion Department of Defense (DoD) American Recovery and Reinvestment Act (ARRA) funds entrusted to us, on top of historic highs/near highs in military construction (MILCON), base realignment and closure (BRAC), Facilities Sustainment, Restoration & Modernization (FSRM), environmental and other parts of our total military program, USACE was responsible for execution of a military program exceeding $32 billion.

Significant growth in the military program began in fiscal 2003 with (then) Global War on Terror funding and USACE has been responsible for a MILCON/BRAC program from fiscal 2006-20009 that totaled $42 billion, inclusive of slightly more than $1 billion this last year in ARRA MILCON.

Total MILCON/BRAC was $18.3 billion for fiscal 2009, inclusive of approximately $4 billion carried over from 2008. ($11.9 billion MILCON/$6.4 billion BRAC)

The USACE Military Programs team successfully executed (obligated) 90.7% of this program.

Our fiscal 2010 MILCON program has not yet been fully defined by the president and Congress, but all indications are it will remain well above the pre-2003 norm, though significantly below the 2009 level.

USACE currently has 725 projects with a combined contract value of $20.4 billion under construction. Fiscal 2008 (302) and 2009 (293) projects comprise the bulk of the on-going construction. The average project cost growth at the end of fiscal 2009 for these on-going construction projects is approximately 1.5 percent.

Average construction contract time growth for the above described construction in progress is slightly less than 7 percent. Slippage between the originally scheduled beneficial occupancy date (BOD) and the currently scheduled BOD is just over 5 percent. Both time growth measures are well within the goals established for these metrics.

ENR: We see there have been changes in the Corps project management and contracting practices that are designed to improve the efficiency of project delivery. What metrics demonstrate whether or not they have been effective?

Van Antwerp: The changes in project and construction management and contracting practices implemented since 2005 are evident in the improvements shown in the table below comparing fiscal 2005 and 2009 data for the Corps� standard metric measures. The metrics below are based on �Completed Construction� (i.e. contract complete date is actual) and measure project cost and contract time growth during construction, BOD time growth (i.e. time growth between the original and actual BOD) and construction duration for various project parameters (i.e. notice to proceed to BOD and project program values).

Comparison of Metrics for Projects Completed in FY05 and FY09

While it may appear that only modest improvements have been made in some metrics, the average project value executed has increased from $16 million in fiscal 2005 to more than $30 million in 2009. Also worth noting, the number of projects executed has steadily increased to the point that the fiscal 2009 program is almost double that of 2005, and the total Army, Air Force and DoD MILCON programs authorized has more than tripled from $4.4 billion to more than $14 billion, all of which is being executed by approximately the same level of Corps manpower. In light of the increases in program and project values and volume, the changes implemented by the Corps since 2005 have distinctly improved efficiency and project delivery.