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Budget Continues DoD Housing Privatization Program

By Jim Garamone
American Forces Press Service

WASHINGTON, Dec. 20, 2000 – DoDs effort to enlist private companies to solve the militarys housing problems can continue due to a provision in the 2001 Defense Authorization Act.

The act extends housing privatization authority through Dec. 31, 2004. Without that extension, the effort -- just now hitting high gear -- would have ended Feb. 2001.

Its a straight-up extension of the existing authorities, said Randall Yim, deputy undersecretary of defense for installations.

The program, started in fiscal 1996, is designed to speed up the refurbishment of existing quarters and the construction of new housing. DoD officials have estimated the old military construction system would take 30 years to deal with the 180,000 substandard housing units DoD has today. They've estimated the privatization program can work off the backlog in 10 years.

Under the basic program, private companies build or refurbish and then manage family housing units. DoD generally would invest up to 25 percent of the cost of a project, and contractors borrow the rest from financial institutions.

Yim said the privatization program's slow start can be attributed to its complexity and newness.

It reflected how new of a construct this was, he said. We had to get both the installation commanders as well as private industry comfortable and convinced that these new techniques would actually work.

He said DoD had to work with all parties to prove the services' long-term commitment to the housing privatization path. Congress has approved many privatization projects in the past year, and there also have been several groundbreakings, Yim said.

Work in Texas and Colorado is demonstrating the program works, he said. At Fort Hood, Texas, for instance, Army officials are scheduled by the end of the year to complete negotiations with private companies on a community development plan. Officials at Fort Carson, Colo., he noted, cut the ribbon on their first new houses under the program Oct. 31.

Its a different contracting mechanism, Yim said. Were not just building houses. Were entering into long-term deals to manage the houses. This includes not only the day- to-day maintenance, but recapitalization -- the building of a reserve for a new roof or other major capital repairs.

DoD is somewhat behind on housing revitalization but the idea, he said, is to stay on track as close as possible to the 2010 goal of eliminating substandard family housing.

Yim said the 2001 increase in members' basic allowance for housing would help fund some construction projects. Deals are going to 'pencil out' better for the private sector. Its going be easier to get quality companies to participate because the profit will be there, he said. The hope, he noted, is to get better quality homes that are built faster.

While the privatization program is limited to the United States, it has a spillover effect on overseas housing. Yim said privatization's leverage frees up military construction dollars that the services could use overseas. He said the Army, for example, has applied some of its dollars to housing in Europe and Korea, where the privatization authority isnt relevant.

Here are the latest privatization projects:

Projects awarded

Fort Carson, Colo. -- 2,663 units

Naval Air Station Corpus Christi, Texas -- 404

Naval Station Everett (Phase 1), Wash. -- 185

NAS Kingsville, Texas -- 150

Dyess AFB, Tex. -- 402

Lackland Air Force Base, Texas -- 420

Robins AFB, Ga. -- 670

Camp Pendleton, Calif. -- 712

Total units, 5,606

Projects in solicitation

Fort Hood, Texas -- 6,631

Fort Lewis, Wash. -- 3,589

Fort Meade, Md. 3,170

Elmendorf AFB, Alaska -- 780

Kirtland AFB, N.M. -- 1,890

Goodfellow AFB, Texas -- 258

NS Everett (Phase 2), Wash. -- 288

NS San Diego -- 3,248

South Texas Regional Housing -- 661

NAS New Orleans -- 935

Marine Corps Logistics Base Albany, Ga. -- 114

Stewart Army Subpost, New Windsor, N.Y. -- 200

Total -- 21,764

Planned projects

Fort Bragg, N.C. -- 6,066

Fort Campbell, Ky. -- 5,222

Fort Stewart/Hunter, Ga. -- 3,273

Presidio of Monterey, Calif. -- 1,713

Patrick AFB, Fla. -- 960

Wright-Patterson AFB, Ohio -- 1,536

McGuire AFB, N.J. -- 999

Tinker AFB, Okla. -- 730

Dover AFB, Del. -- 450

Little Rock AFB, Ark. -- 1,535

Vandenberg AFB, Calif. -- 506

Moody AFB, Ga. -- 696

Offutt AFB, Neb. -- 2,580

Charleston AFB, S.C. -- 488

Hill AFB, Utah -- 1,116

Hampton Roads Regional Housing, Va. -- 80

Marine Corps Air Station Beaufort/MCRD Parris Island, S.C.  -- 684

Total -- 28,634

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