The SEG’s objective is to share information among industry and the uniformed services, bridge gaps in understanding the differences in perspectives among the group, identify trends, and promote partnerships between the public and private sectors in the A/E/C arena.

SEG Members in attendance May 18, 2004

Navy Perspectives

Rear Adm. Loose summarized the Navy contributions in Iraq. There are approximately 1,100 Seabees on station in Iraq supporting the 1st Marine Expeditionary Force.Typical missions include support to combat forces, and the repair of schools, clinics and hospitals. Commander, Navy Installations Command, has 56,000 personnel and is the centerpiece of the Navy program to centralize the Navy shore infrastructure from eight Shore Installation Major Claimants to one.The Naval Facilites Engineering Command (NAVFAC) will retain responsibility for Navy facilities’ technical authority, maintenance, engineering and acquisition. NAVFAC also will combine Navy Public Works Centers and Engineering Field Activities into Facilities Engineering Commands, revolutionize Business Line leadership, improve business processes world-wide and integrate Installation Public Works Departments into NAVFAC.Within each Region, the Facilities Engineering Commands will be the single touch-point for all NAVFAC public works, engineering and acquisition support.The NAVFAC reorganization to combine the Engineering Field Divisions and Public Works Centers into Facilities Engineering Commands is expected to save about $27 million in operations funds and reduce the number of Civil Engineer Corps officers.

The Navy is pursuing a “risk based” strategy for its Anti-Terrorist & Force Protection (ATFP) program. Under this policy, the highest risk facilities or operations will receive the highest priority for ATFP analysis and funding. Design-Build is still the Navy’s “default” position for construction with about 60% of all Navy construction using this method of procurement. Additionally, the Navy is conducting a pilot program for Design-Build-Commissioning for 12 projects. Under this program the construction contractor will operate and maintain the new facility for five years. No data is yet available to confirm the success of this approach, but the Navy believes it will be very successful.

Army Perspectives

Lt. Gen. Flowers presented an update on Army issues and trends.The Army Civil Works program spends about $8 billion per year and uses about two-thirds of the USACE workforce with about 65% of the design effort going to AE firms. On the military side, a $12 billion program is executed by about one-third of the USACE workforce with almost 100% of the design effort being handled by AE firms.

According to Lt. Gen Flowers, this is the worst year in the history of the Civil Works program because the Army is working from a continuing resolution that only allows the Districts to work at “prior year” levels.Therefore, no “new starts” are possible under this situation. Lt. Gen. Flowers expects that FY05 will be better.

The Water Resources Development Act, currently making its way through Congress, will authorize substantial funds; however, it is unclear how much of those funds will ultimately be “appropriated” for expenditure in the near future.

There is a crisis looming in civil infrastructure in the United States, which now has a backlog of maintenance and rehabilitation needs totaling close to $1.5 trillion. Cities can expect severe infrastructure breakdown in the next five years if corrective action is not taken. Future expansion of the U.S. economy will depend on our infrastructure, yet states are not capable of funding the needed repairs without substantial federal funding.

USACE has fielded a new Division in Iraq with three engineer Districts to assist in executing the $18 billion the United States has approved for Iraq reconstruction. All U.S. funding will flow through the USACE Division for execution and fiscal control. The Program Management office of the Coalition Provisional Authority is defining specific infrastructure reconstruction projects that will be turned over to this USACE Division for execution.This funding, coupled with $10 billion in funds from donor nations and an expected $11 billion in oil revenues, should make up the majority of the estimated $55 billion needed to restore the Iraq infrastructure to the level needed to sustain peace.

A related issue is the growing problem of security operations that consume approximately 20-25% of all available reconstruction funds. Firms planning to work in Iraq should expect to hire security forces as part of their contract. Similarly, contract employees need to be integrated into the military intelligence collection efforts to maximize the quantity and quality of information needed to defend against terrorist activities in Iraq.

Lt. Gen. Flowers made a strong statement concerning the enormous progress that has been made in improving the quality of life in Iraq, mostly through engineer operations.These “good news” stories are rarely reported in the news and he encouraged all to go to the USACE Web site to view the many positive examples of U.S. assistance that are recorded there.

Air Force Perspectives

Maj. Gen. Fox gave a brief overview of the participation of Air Force engineers in Operation Iraqi Freedom. He described the enormous contribution made by his forces in converting former Soviet bases for use by Coalition aircraft during and after the war. In addition, Air Force engineers spent approximately $700 million in reconstruction funding, mostly for Iraqi Air Bases, schools and medical facilities.

The Air Force engineers are also augmenting the Army in such specialties as fire, transportation and explosive ordnance disposal. He now has about 2,500 engineers in country, down from about 4,500 at the peak of his operations. The Air Force FY04 MILCON appropriation of $1.6 billion is the largest in years and is expected to continue into the near future.

In the area of troop and family housing, Maj. Gen. Fox expects to privatize 60% of family housing units. He noted that Congress will need to remove the cap on privatization scoring to achieve the FY07 goal for a complete buyout of the housing; although he expects a FY07 buyout for airmen dormitories.

In the environmental category, he expects that funding for unexploded ordnance removal on ranges will increase. His staff predicts that they will meet their goals for clearing the high, medium and low risk sites on schedule.

USPHS Perspectives

Capt. Sven Rodenbeck, P.E., DEE, Sc.D., reported on the USPHS for Rear Adm. Robert C. Williams, who could not attend.

The USPHS has provided technical support in Iraq and Afghanistan, mostly to assist those nations in bringing their health facilities up to Western standards. Rodenbeck reported that the USPHS has increased its attention to indoor air quality.

The Surgeon General, Vice Adm. Richard H. Carmona, has approved the convening of a “Surgeon General’s Workshop on Healthy Indoor Environment.” The workshop will occur in the Fall/Winter of 2004/2005 in the Washington, D.C. area.The goals of the workshop are to seek corroboration throughout the public health community, including engineers and architects of the building construction community that will result in a reduction of indoor environment-related illnesses. Furthermore, the workshop will seek to better define public health issues and research needs as related to the Healthy Indoor Environment Initiative.

More details about the workshop will be announced by the Office of the Surgeon General ( www.surgeongeneral.gov) sometime this summer.

In the area of homeland security activities, the National Institutes of Health will increase the number of Biosafety Level 3 (BL3) laboratories.The number of BL4 laboratories has already been increased two-fold. The Centers for Disease Control and Prevention plans to budget approximately $1 billion in grants to local health agencies to improve biosafety facilities and local capacity to respond to emergencies.

On a final note, the USPHS plans to double, or even triple, the number of uniformed officers they have in service to expand their ability to respond to national security and homeland defense efforts.

Industry Perspectives.

The primary area of discussion raised by industry members was on surety issues that appear to be impacting the A/E/C industry and DOD contracts. It seems that government agencies are requiring considerably more surety on remediation contracts than are actually required, considering the risks involved and improvements in technology. Questions raised included, Can the uniformed services create a less risk adverse contract mechanism that will reduce the level of surety required for the duration of the contract? Are there other options to bonding, such as letters of credit or other means that will not consume the capacity of the bonding industry? Is good performance a justification or an incentive for reducing the bonding requirements? For example, if a contractor is performing well and risk is low, why should the bonding be held to the original high standards established at the onset of the contract?

The new Chair of the Industry Affairs Committee agreed to work with the Executive Director to schedule a forum for discussion of these issues with government- and privatesector participants.

Concluding Remarks:

As the outgoing Society President, Rear Adm. Johnson thanked everyone for their support and continued participation in the Society and the SEG. As the incoming Society President, Maj. Gen. Fox stated that his focus would be published in the June SAME’s News and would culminate at the 2005 National Conference in Louisville. Maj. Gen. Fox feels strongly that the real work of the Society is carried out at the Post level and he intends to concentrate on reinvigorating the Society from that level. In addition, he feels strongly that more emphasis needs to be placed on Young Members to give them more visibility and to ensure that they enjoy their jobs and their SAME Post activities.

The next regularly scheduled SEG meeting will be in St. Louis on Nov. 9, 2004; however, there may be another SEG meeting to address surety issues prior to November.