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Aligning the Incentives of the Various Entities at Each Step of the MILCON Process and Removing Funding, Information, Timing, and Resource Barriers Would Enable DoD to Obtain Facilities That Are More Life-Cycle Cost-Effective

• DoD is currently incorporating life-cycle cost-effectiveness practices in many aspects of the MILCON process.
• Information, funding, and organizational issues create barriers to life-cycle cost-effectiveness for facilities.
• Requiring contractors to demonstrate life-cycle cost-effectiveness in proposals could raise costs and risks without guaranteeing commensurate savings.
• Improving standards and performance guidelines to include life-cycle cost-effectiveness elements into the planning, design, and construction processes remains an opportunity.
• Construction materials are largely dictated by building codes rather than by the services.
• Life-cycle cost benchmarking across services and with comparable institutions can assist decisionmaking.

The Department of Defense (DoD) constructs, operates, and maintains a large number of facilities, such as barracks, hangars, and administrative buildings. In fiscal year 2013, DoD will spend nearly $10 billion constructing new facilities, and about the same amount or more operating and maintaining existing facilities. By focusing on reducing the life-cycle costs of its facilities, DoD can minimize its total cost of facility ownership. Accordingly, DoD incorporates life-cycle cost-effective practices into many aspects of the military planning and construction processes, but challenges and opportunities in the process remain. This report provides RAND's description and assessment of the process used to obtain life-cycle cost-effective facilities and how that affects DoD construction options and choices.

The research approach featured structured interviews with more than 30 individuals with varying roles and perspectives on the military construction (MILCON) and facility sustainment processes. The research team also reviewed MILCON protocols, policies, documents, and contracts to characterize the process of obtaining life-cycle cost-effective facilities. At each step of the MILCON process, there are different entities, roles, incentives, and barriers to obtaining life-cycle cost-effective facilities. Aligning the incentives of these various entities, and removing funding, information, timing, and resource barriers, would enable DoD to obtain facilities that are more life-cycle cost-effective.

• Chapter One

  Introduction

• Chapter Two

  The DoD Facility Development, Construction, and Operating Process and Barriers to Life-Cycle Cost-Effectiveness

• Chapter Three

  The Role of Building Codes in Determining Construction Material

• Chapter Four

  Trade-Offs Between Annual O&M Costs and Initial Capital Costs

• Chapter Five

  Conclusions and Observations

• Appendix A

  RAND Interview Protocol Used in this Research

• Appendix B

  Navy MILCON Team Planning and Programming Process Diagram

• Appendix C

  Sample U.S. Army DD Form 1391