Army to deal with budget cuts by sharing services with local communities

The military already has shown it can improve services on bases through public-private partnerships. As budgets shrink, the next task is to partner with local g...

The Pentagon has made it clear that even under the rosiest of budget scenarios, funding for maintenance and infrastructure on military bases is relatively low on its list of priorities. So the Army wants to move aggressively to offload some of those functions to the local communities around its facilities wherever possible, an arrangement it thinks would be much more cost-efficient, officials said Tuesday.

The Army has some help from Congress in this regard. Even if lawmakers won’t let the service shutter excess infrastructure, they did endorse a new, streamlined process for public- public partnerships in this year’s National Defense Authorization Act. The new authorities let DoD officials sidestep the strictures of the Federal Acquisition Regulations and sign up for sole-source arrangements with local governments outside the gates of their bases.

The updated law still requires the sign-off of Pentagon officials for any deals they reach with local officials, but a new process dubbed the Army Communities Initiative promises to turn those requests around within 10 business days, said Ivan Bolden, the chief for privatization and partnerships at Army headquarters.

“I know that’s unheard of within the Pentagon, but that’s our goal, and we don’t see any reason why we shouldn’t meet it, as long as it has a strong business case analysis behind it,” he told an installation management conference hosted by the Association of the U.S. Army in Arlington, Virginia on Tuesday.

The concept is relatively straightforward and relies on economies of scale: Why should a local installation commander operate his own sewer or street maintenance department if the folks at city hall are running an identical public works infrastructure a few miles away?

In the scant number of cases in which base commanders have reached accords with local officials to share public works services, they have shaved their maintenance budgets by between 22 percent and 41 percent.

New website to share success stories

Until now, those agreements have been few and far between because local commanders and city officials needed to make themselves experts in federal procurement law to make them work. And even under the new streamlined process, the Army realizes it will need to offer expert advice to local commanders on how to structure business deals and build business case analyses, as it did when it created a task force of specialists to advise commanders on public-private energy projects.

In the case of public-public partnerships — otherwise termed Intergovernmental Support Agreements (IGSA) under the authorities Congress just passed — the task will fall to the Army’s Installation Management Command, which will need to build its own professional cadre of personnel to assist local commanders.

Also, within the next two weeks, the Army plans to launch a public-facing website so that city managers and base commanders across the country can quickly see which kinds of partnerships already have worked in other places and gained approval from Army headquarters. Bolden said the goal is to avoid reinventing wheels and approve local agreements as quickly as possible.

“Our intent is that the community can see what we’re doing and share ideas,” he said. “We’re also locked in with the Air Force and the other services. We talk to them weekly so that we can share ideas because, after all, we have joint bases, and if it’s a good idea at an Army base, it might work at an Air Force base or a Navy base.”

In the initiative’s early days, good ideas worth sharing still are fairly scarce, but one example is so successful that’s it’s become known as the “Monterey Model” within the Army’s installation management ranks.

On the Monterey Peninsula in Northern California, not only do various military organizations share services with one another, but most of the on-base public works functions are actually provided by the City of Monterey in what officials say is a seamless environment that’s been working well since they first begin experimenting with the idea in 1997. But to pull it off, local officials have had to stitch together several separate legal agreements that relied on a complex mesh of authorities in federal law.

Cut overall costs by 22 percent

Rep. Sam Farr (D-Calif.), who represents the area, wanted to make it easier to extend the Monterey Model to the rest of the country, and pushed for the IGSA legislation Congress first enacted in 2013 and clarified in December.

“We thought we were onto something great in Monterey,” said Rochelle Dornatt, Farr’s chief of staff.

“The reason it took us a while to get the rest of Congress to agree with us is that our installations in Monterey are very small. They really couldn’t see how the results we were getting would translate to larger places. But in the end, the numbers don’t lie. Our bases were saving money, they were more efficient, and we were finally able to convince others of that.”

Monterey hosts an eponymous Army presidio plus the Naval Postgraduate School, the Defense Language Institute and a Coast Guard station. Those organizations, put together, are indeed smaller than many of the country’s larger military bases, but pooling some of their support functions and partnering with the city to deliver them has cut their overall costs by 22 percent, according to a 2012 audit.

“What that means is that the Presidio is getting about $1.5 million in cost avoidance, or additional services, depending on how they want to allocate the savings,” said Danial Pick, Monterey’s deputy city manager. “This model works.”

The Army freely acknowledges it’s had some false starts on public-public partnerships in the past.

An earlier attempt never got off the ground, partially because Pentagon lawyers concluded that the language of the 2013 law, as it was written, would require the military to work through the traditional competitive acquisition process.

Patience required

But Army officials say the updated language Congress passed in December largely solves those problems, leaders at the Pentagon are committed to making the arrangements work, and they are strongly encouraging base commanders across the country to look for ways to cooperate with local officials.

“The thing we’re doing differently this time as opposed to last time is that you have an advocate in the headquarters,” Bolden said. “We went around to all of the senior people including the deputy assistant secretary for procurement, the deputy assistant secretary for cost and economics, the small business office, the general counsel. Everyone’s on the same page now. You have an advocate for this at headquarters that includes all the senior leaders in the Army.”

But Col. Paul Fellinger, who took over as the commander at the Monterey presidio in 2013, said his counterparts around the country will need to be patient and commit themselves to a cause that outlasts their command if any of the new projects are going to reach the agreement stage.

“I walked into a very, very good situation where there was a long-term relationship that had already been going on, and I quickly realized that mission failure on my part would be to let that situation deteriorate,” he said. “One of the biggest problems with these things is that a garrison commander is only in charge for two years. So how much of your time do you want to dedicate to something that’s not going to come to fruition during your tenure? Who’s going to be there for the long term?”


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