Family Housing Renovation, Air Force

When the Air Force inherited the Charleston Naval Base from the Navy in 1996, it also received the blighted Hunley Park military family housing project.

At the time, the Air Force didn't want the housing because it was in serious disrepair, says Lt. Col. Craig Armstrong, staff director at the 437th Airlift Wing.

The homes required extensive renovation, both inside and out. They also required underground utility work. To make matters worse, the houses were insulated with asbestos, a proven carcinogen.

But Congress wanted the Air Force to take over responsibility for Hunley Park and earmarked $7.4 million to help begin the much-needed renovation. "Congress sweetened the pot," says Armstrong, who was commander of the 437th Contracting Squadron during phase one of the project. He was also the team leader of the Hunley Park Integrated Project Team, which brought together contracting, engineering and architectural professionals to help get the renovation job done more quickly.

Armstrong and his group had no choice but to innovate. Congress allocated funding for the project in November of 1997 and wanted the money spent by March 31, 1998. This seriously crimped the normal lead time for contract preparation, project design and execution. Traditionally, it would take 180 days just to get the design completed for such a renovation.

"The Air Force landscape is strewn with bad housing projects," Armstrong says. "We put our heads together and figured out a better way of doing this project."

Renovation work is always fraught with potential for cost overruns, Armstrong says. "In renovation, you don't know what is underneath the ground, in the walls or in the wires, even underneath in the piping. You don't know where asbestos is," he says. "When you award a contract without this knowledge, most of them end up costing a lot more than was originally anticipated."

Moreover, renovation contracts often take much longer than expected because each time a new site condition is discovered, the contract must be modified to take into account new supply costs. As a result, the government must also reimburse the contractor for supplies already purchased by the contractor that will go unused. This causes a Catch-22: Making contract modifications takes time, and the government must reimburse the contractor for time lost on the job as a result of making changes.

Common wisdom says this process is how some contractors make profits, especially after filing exceptionally low bids to win contracts.

In hopes of figuring a way around the problems inherent to renovation projects and guarantee that the Hunley Park project would be completed on schedule, the 437th Contracting Squadron put together the Hunley Park Integrated Project Team.

"This innovation was originally motivated by fear," Armstrong says. "This is because we were given so little time to make plans for the project and award it."

By creating the integrated team, the Air Force was able to manage the various aspects of the project concurrently rather than having the aspects laid out end to end over the period of a year. This significantly cut the time required to scope, award and complete the contracted work.

"We did a design that would normally take six months in two months," says Ellen Maggard, chief of construction in the 437th Contracting Squadron. She was also the contracting officer for the renovation.

Team members conducted "over-the-shoulder" reviews of the design, commenting on it along the way as contracting officials were putting out the solicitation. Because of the team effort and people working on concurrent projects, the overall project was completed in just over four months rather than the year it normally would have taken, Maggard says. But the problem of defining the scope of the renovation project without wasting money remained. The team wanted to find a way to discover the different site conditions before designing a final solicitation. But time was tight, and the money had to be spent. Eventually team members came up with the idea of prototyping. The team built a phase into the end of the contract that required the contractor to take a few homes and experiment with them to discover various site conditions before equipment and materials were ordered for the job.

"We required the contractor to build three model units," Armstrong says. "The contractor could not order materials until after an inspection of the model units." The team also decided to avoid certain long-standing inevitabilities in the construction contract process. They began by ensuring that the lowest bidder would not automatically receive the contract. Legends of cost overruns and shoddy work with substandard materials are myriad in construction contracting.

In the request for proposals, the team set out a set of skills that each bidding contractor was required to possess. First, contractors had to have experience with whole house renovation. And second, contractors had to know how to do underground utility renovation.

Such past performance criteria were designed to elicit the best cross section of contractors and bids. Then the team used a best-value selection approach. "We told people they had to give a price for the contract as well as give us information on every government contract they had ever worked on," Armstrong says. "We evaluated each contractor's past performance and did a tradeoff between price and past performance." The approach paid off. The lowest bidder had none of the skills set out by the RFP. In fact, the contractor had only limited experience renovating kitchens and bathrooms and was not prepared for hazardous substance removal, underground utility work or exterior work such as siding and roofing.

"The lowest bidder had never been involved with any of the type of work our requirements set out," Armstrong says. "The closest thing they had done was kitchen and bathroom renovation. We were very specific in the requirements we set out in the RFP-the contractor had to have had real experience."

The contract was eventually awarded to H&N Constructors, a small firm in Louisville, Ky., which then renovated the three prototype homes in the Hunley Park project. The contractor was able to refine its expected material needs and cut long-term costs for itself and contracting labor on the part of the government.

Once H&N Constructors finished the prototype units, the team decided to let the future occupants, Air Force junior enlisted families, tour the homes and make suggestions as to how they could be made more livable."We called it the Charleston Air Force Base 'Parade of Homes,'" Armstrong says. "We thought, 'Now we can let potential occupants come in and see the units, and tell us what they like and don't like.' This idea was born out of our own integrated product team meetings."

The local Army Air Force Exchange Service provided furnishings for one of the models, and the contractor threw in hot dogs and clowns for the festivities. Eight hundred people turned out for the event. Some of the family recommendations made it into the final design for the rest of the project. "It resulted in very good suggestions," Maggard says.

"In order to incorporate any changes, we wrote a 45-day stop-work period into the contract," Maggard says. "During this time we reviewed any problems that cropped up and incorporated suggestions into the contract."

By building the models and being prepared for a contract modification up front, the total cost increase of the project as a result of the prototyping and model suggestions was just $35,000-a 0.06 percent cost increase, a fraction of typical renovation projects."Now, the idea of doing prototype units is the benchmark for all Air Force base housing renovation contracts," Maggard says.

The Hunley Park renovation is continuing to this day. Some airmen have told their commanders that they have chosen to remain in the Air Force because they could not afford the quality of housing provided at Hunley Park outside the service. In the renovated homes, airmen and their families can be proud of where they live, says Senior Airman Alexander Rossetto, a network adminstrator for the 437th Maintenance Squadron. Rossetto first lived in the unrenovated section of Hunley Park and moved into a refurbished house recently. "From that housing to this is a big step up," Rossetto says. "It's like living in a brand-new house."

In the back, Rossetto has a patio as well as a screened-in porch. His backyard is surrounded by a wooden fence. Rossetto was particulary happy with the little things that made his life easier, such as a pantry and a more convenient location for the washer and dryer. "We have something to be proud of," Rossetto says. "Now we can have a barbecue or invite friends and family over."