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Management of the military facilities procurement program. Final report (1971)

Chapter: Small Projects of a Routine Nature

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Suggested Citation:"Small Projects of a Routine Nature." National Research Council. 1971. Management of the military facilities procurement program. Final report. Washington, DC: The National Academies Press. doi: 10.17226/28198.
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Suggested Citation:"Small Projects of a Routine Nature." National Research Council. 1971. Management of the military facilities procurement program. Final report. Washington, DC: The National Academies Press. doi: 10.17226/28198.
×
Page 10
Suggested Citation:"Small Projects of a Routine Nature." National Research Council. 1971. Management of the military facilities procurement program. Final report. Washington, DC: The National Academies Press. doi: 10.17226/28198.
×
Page 11
Suggested Citation:"Small Projects of a Routine Nature." National Research Council. 1971. Management of the military facilities procurement program. Final report. Washington, DC: The National Academies Press. doi: 10.17226/28198.
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Page 12

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prepared with the use of private architect-engineer firms Once PCE's are finalized. Headquarters of the Facilities Procurement Agents review and modify a l l estimates to reflect inflationary trends and to ensure comparability of unit costs between field offices and the military Departments Final budget estimates are then made and the programs forwarded to the Office of the Assis- tant Secretary of Defense (Installations and Logistics) I f some of the di;Q)licative steps of checking, rediecklng, revising, and refining init ia l cost estimates during the planning and program- ming cycle could be reduced, much time and paperwork could be eliminated Further, i f the quality of these in i t ia l cost estimates were to be significantly ipgraded, i t would be possible m many cases to eliminate the need for further effort in cost estimating (except possibly for inflationary trend adjustments, etc ) until the project is let for design Also, by centralizing this function at the field office level, i t is likely that the work load would be sufficient to justify a cost-estimating specialist on the procurement management team Since the ultimate responsibility for budgeting actually rests with the Facilities Procurement Agent, and m keeping with the theme of the management concept already recommended, i t has been recommended that responsibility for preparation of the in i t ia l cost estimates required for DD Form 1391 be delegated to the regional field offices of each of the Facilities Procurement Agents It further has been recommended that the quality of the in i t ia l cost estimates made for DD Form 1391 be upgraded so that, to the extent possible, they can serve, without modification, for a l l planning, programming, and budgeting purposes prior to inclusion of projects in the annual military facilities procure- ment program of the respective Department which is submitted to the Office of the Assistant Secretary of Defense (Installations and Logistics) 2 4 2 Small Projects of a Routine Nature—Less than $500,000 The Committee made an analysis of the specific line item content of the annual military facilities procurement programs of the past several years The analysis revealed that approximately 50 percent of al l projects in each annual program involved a direct expendi- ture of less than $500,000 each but that these projects represented only approximately 10 percent of the total dollar volume of each annual program The analysis also revealed that most projects in this cost range were relatively routine m terms of technical complexity when compared with larger projects m the program It was also determined during interviews with personnel of eadi military Department that l i t t l e , i f any, differentiation is made between large and small projects included in an annual military facilities program during the planning, programming, and funding cycle That i s , for any project to be included in the annual facilities program, a DD Form 1391 presently must be prepared at 50

the installation and from the point of stibmission of the form by the installation commander to appropriation of funds by Congress, the size of the project has l i t t le relevance to the review proce- dures executed An exception is the truly large projects which receive more scrutiny as to justification of need and cost est i - mates The Committee feels that i f the extent of evaluations and review procedures were more in proportion to the size and impor- tance of a project, considerable savings of both time and money could be achieved 2 4 2 1 Cost Estimates - Ini t ia l cost estimates are made at the beginning of the annual planning and programming cycle It was recommended m Section 2 4 1, Responsibility for and Quality of Init ia l Estimates, that cost estimating activity be centralized and that the quality of estimates be upgraded so that they could serve without modification to the extent feasible throughout the planning and programming cycle With this upgrading of quality and centralization of the process, estimates made for small projects of a routine nature ( i e , those costing less than $500,000) should be sufficient not only for purposes of planning and programming but also for purposes of funding Accordingly, i t has been recommended that the init ia l cost estimates formulated for DD Form 1391 serve as the sole cost information to be generated for projects considered to be routine in nature and costing less than $500,000 each, during the annual planning, programming and funding cycle It I S recognized that the word "routine" is broad in meaning but the Committee believes that the Facilities Procurement Agents are best qualified to decide which projects costing less than $500,000 can be considered routine 2 4 2 2 Review of Small Projects of Routine Nature 2 4 2 2 1 Review by the Military Departments - Presently, with the exception of a limited nimiber of projects that must be introduced annually as a result of mission changes for installations durxng the year in question, each project to be included m an annual military facilities program, whether large or small, generally is reflected m the construction annex of the Five Year Defense Plan The military Departments have, therefore, usually reviewed and approved each project prior to its inclusion in the annual military facilities prociirement program In this light and coupled with the recommendation that in i t ia l estimates of construction costs be iqjgraded, i t appears quite reasonable to relax the detailed examination of the small routine projects at each approving command level 51

Accordingly, i t has been recommended that a l l projects considered to be routine in nature and estimated to cost less than $500,000 each, be aggregated during the annual planning and programming cycle at each approving military command level and presented to each successive approving command level as a single-line item, delineated only by the total dollar amount and a l i s t of projects by facility classification (e g , operational facil ity, maintenance facility) * Implementation of the above recommendation should result in a significant reduction of the paper work and reviews presently required for these small projects and should significantly reduce the time required for their process- ing Execution requires that the f irst approving command level receive from installations m that command, the listings of projects costing less than $500,000 each The f irst approving command would then aggregate the listings received from the installations into one package I f the total dollar value of the aggregate plus the value of a l l other projects that constitute the command's total military facilities program is within the fiscal guidance that has been provided, the command need review for con- tent only, to ensure that the projects are appropriate for the annual military facilities program Since pro- ject priorities are established at each reviewing command level, should the total dollar value of a l l projects received at a command level exceed the fiscal guidance provided or should a reduction in the fiscal guidance be received during the review process, i t would be necessary to communicate only with the installation involved with a reduction The installation would need to specify whether the reduction should be made from the package of $500,000 or less projects, or whether another more expensive project not included in the package should be dropped This procedure then could be followed at each approving or reviewing level until the entire military Department's program is readied for submittal to the Office of the Assistant Secretary of Defense (Installa- tions and Logistics) While the recommended packaging procedure currently can be effectively employed within existing procedures used to priority rank facilities in the annual military facilities program, implementation of recommendation 2 3 2 1, Establishment of Standard Criteria for Project Evaluation, should greatly improve the process It IS not intended that urgent minor construction projects be considered in the packaging because such projects have not previously been included m the construction annex 52

2 4 2 2 2 Department of Defense Reviews - Personnel requirements and paper work associated with the processing of small projects could be further reduced and project processing accelerated, i f the Office of the Assistant Secretary of Defense (Installations and Logistics) would accept the packages of such projects as a single-line item for each military Department and limit examination of content to that necessary to ensure compliance with policy While i t is recognized that certain projects, even though of a routine nature, wil l be of unusual importance and that the mechanism for proper review will be to examine the DD Form 1391 and attendant sijpporting information, such practice by the Office of the Assistant Secretary of Defense (Installa- tions and Logistics) should be the exception rather than the rule i f the packaging procedure is to effect the intent of saving man-hours and time during the planning, programming, and the funding cycle Accordingly, i t has been recommended that the Office of the Assistant Secretary of Defense (Installations and Logistics) review the content of the packages of small, routine projects submitted by each military Department only to ensure policy compliance 2 4 2 2 3 Congressional Review - The necessity for Con- gressional review and approval of the military facil it ies program is fully understood by the Committee However, in light of repeatedly expressed desires on the part of Congressional Authorization and Appropriation Committees for the military Departments to demonstrate economies in the planning and design processes required in the conduct of their military facilities program, the Committee believes that the Congress can significantly aid in this effort by foregoing its detailed review and evaluation of the small, routine projects included in the annual facilities programs As will be the case with the Office of the Assistant Secretary of Defense (Installations and Logistics), certain of the routine projects wil l be of unusual importance and i t will be necessary to have infor- mation from Form 1391 and periiaps even additional infor- mation Such a practice by Congress also should be the exception rather than the rule i f the full benefits of packaging small projects are to be realized In convey- ing this request to the Congress, i t should be pointed out that funds for more than 80 percent of a l l projects svdbmitted annually by the Department of Defense are approved and granted by Congress Small projects (those costing less than $500,000 each) represent only about 10 percent of the total dollar value of an annual program Ihus, i f i t I S assumed that as many as 50 percent of the disapproved projects were small, i t can be conservatively 53

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