Obtaining Life-Cycle Cost-Effective Facilities in the Department of Defense

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 RAND⁰́₉s 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 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 RAND0́9s 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 Key findings -- Acknowledgments -- Glossary -- Introduction -- Legislative background on life-cycle cost analysis for military construction -- Study motivation and research approach -- Outline of this report -- DoD facility development, construction and operating process and barriers to -- Life-cycle cost-effectiveness -- Incentives and barriers to life-cycle cost-effectiveness at each step of the military -- Construction process -- Role of building codes in determining construction material -- The role of the international building code and building types -- Tradeoffs between annual O & M costs and initial capital costs -- Conclusions and observations -- DoD is currently incorporating life-cycle costing in many aspects of the MILCON -- Process -- Challenges in obtaining life-cycle cost effective facilities -- Observations and potential improvements -- 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, from USACE. Summary Key findings Acknowledgments Glossary Introduction Legislative background on life-cycle cost analysis for military construction Study motivation and research approach Outline of this report DoD facility development, construction and operating process and barriers to Life-cycle cost-effectiveness Incentives and barriers to life-cycle cost-effectiveness at each step of the military Construction process Role of building codes in determining construction material The role of the international building code and building types Tradeoffs between annual O&M costs and initial capital costs Conclusions and observations DoD is currently incorporating life-cycle costing in many aspects of the MILCON Process Challenges in obtaining life-cycle cost effective facilities Observations and potential improvements 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, from USACE.