Congressional P3 Caucus Reconvenes to Consider P3 Solutions for Department of Defense Infrastructure

by Nossaman LLP

The "Congressional Caucus on Public Private Partnerships" reconvened on April 29, 2014, inviting the installations Assistant Secretaries of the Army, Navy and Air Force to discuss how the U.S. Department of Defense ("DOD") might use public-private partnership strategies to solve installation infrastructure challenges.  Representatives Mike Rogers (R. Alabama, 3rd District) and Gerry Connolly (D. Virginia, 11th District) co-chaired.

Congressman Rogers split the discussion into three parts.  First, he asked for the panelists how “P3s” have solved DOD challenges in light of recent budget challenges.  The Honorable Katherine Hammack, Assistant Secretary of the Army (Installations, Energy and Environment), described the U.S. Army’s success with energy savings performance contracting, privatizing soldier family housing and “Army Lodges” (Army-run hotels).  The Honorable Dennis McGinn, Assistant Secretary of the Navy (Energy, Installations and Environment), discussed the Navy’s success in P3 strategies to solve infrastructure, real property and energy problems.  He also highlighted a Navy program to create infrastructure for public-private collaboration, such as the Navy’s battery innovation program.  The Honorable Kathleen Ferguson, Acting Assistant Secretary of the Air Force (Installations, Environment and Logistics) related similar successes, noting that “enhanced use leases” have made better and higher use of underused facilities on Air Force bases, leveraging $620 million of Air Force Assets to draw over $8.3 billion in private investment.

All three panelists lauded “Section 331" legislation (H.R. 4310 (112th) National Defense Authorization Act for Fiscal Year 2013, Section 331 "Intergovernmental support agreements with State and local governments") as empowering DOD military departments to partner with other public entities (at the state and local levels) and private entities to present and solve additional partnership opportunities. Secretary Hammack described such a "P4" as solving the purchase and storage of road salt on favorable economies of scale, when the Army post and its host community pooled their purchasing power to obtain salt at a lower price.

Congressman Rogers next addressed how the U.S. Congress could assist DOD in making P3 solutions easier to employ.  Each of the three participants favored changes to enabling legislation that would allow for longer term contracts and solve Congressional Budget Office (“CBO”) project-prohibiting deal scoring.  Congressman Connolly echoed the Secretaries’ sentiments, suggesting that Congress should act to abrogate CBO’s “infallible” and outdated scoring methods.

Congressman Rogers concluded by asking attendees if they had suggestions for other areas or issues that would benefit from P3 strategies.  Participants related that concessions of military installations’ water and wastewater facilities are underutilized.  Others suggested that bases reconsider what facilities needed to be “on the base” versus those that could be off base, possibly allowing for social infrastructure development under a performance-based P3 delivery of supporting facilities as fertile ground in a budget challenged environment.  Secretary Hammack echoed this sentiment to the Congressmen.

Both Congressmen invited further input and draft legislation from interested parties to further the P3 Caucus’ efforts to raise awareness among members of Congress on the utility of public-private partnerships.

Katherine Bourdon co-authored this entry.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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