US Army Corps

of Engineers

OfficeoftheChief

of Engineers

NEAR EAST PROJECT OFFICE NEPO

Tel Aviv, Israel

EP .5-1-5

September 1982
Lessons Learned on Israeli Airbase Program

U. S . Army Corps of Engineers

Near East Project Office

BG(P) John F . Wall, Commander

September 1982

Tel Aviv, Israel

MANAGEMENT OF LARGE, REMOTE

SPECIAL CONSTRUCTION PROJECTS
FOREWORD

One of the U . S . Army Corps of Engineers' most sensitive and highly visible

international construction projects was construction of two fighter airbases

in Israel--a project which reflects a national commitment, through Presidential

diplomacy, to the establishment of - a permanent peace in the Middle East . This

mission was linked to the terms of the Camp David Accords requiring withdrawal

of Israeli Forces from the Sinai by 25 April 1982 .

The "fast track" nature of this project placed heavy demands on all concerned .

Moreover, the "cost plus" contracting required intense involvement by Corps

personnel .

This document presents specific problems from a "Lessons Learned" standpoint

with a view to advancing Corps-wide awareness of problems associated with

projects of this nature .

7J . K . BRATTON

Lieutenant General, USA

Chief of Engineers
iii

MISSION

. Build two technically advanced highquality airbases in three years and at a

reasonable cost . . . in accordance with

the Camp David Peace Agreement .

ACCOMPLISHMENT

In April 1982 (9 months earlier than contractually required), the U .S . Army Corps

of Engineers delivered two high-quality

fully operational airbases, Ramon and Ovda,

to the Israel Ministry of Defense at a cost

of within 4 percent of the original estimate .

NEPO MISSION AND

ACCOMPLISHMENT

Alrbase

Ovda Ramon Total

Area, square metres

Vertical structures floor space 230,000 240,000 470 .000

PCC pavement 300,000 320,000 620,000

Asphalt pavement 1,200,000 1,100,000 2,300,000

Project within fences 34,500,000 22,000,000 56,500,000

Volume, cubic metres

Excavation 11,000,000 12,000,000 23,000,000

Concrete 400,000 500,000 900,000

Weight, metric tons

Cement 127,000 150,000 277,000

Bitumen 18,000 15,000 33,000

Reinforcing steel 16,500 17,300 33,800

Structural steel 2,100 2,700 4,800

Length, linear metres

External utility installations 644,000 558,000 1,202,000

Number

Precast wall panels 1,800 1,800 3,600

Design drawings 5,720 6,150 11,870

Labor, manhours

Direct 13,200,000 10,270,000 23,470,000

Indirect 9,600,000 6,430,000 16,030,000

Total 22,800,000 16,700,000 39,500,000
EXECUTIVE OVERVIEW

The Israeli Airbase Program (IAP), a fast-track construction project in a technically advanced country,

has generated some lessons of possible benefit to

others .

The staff of the Near East Project Office (NEPO) made

a midcourse review of the project and identified and

set down some of its views of managing cost-plus-fixedfee contracts in a fast-track environment . This review

was updated and the following are excerpts that I consider key .

.1 . A fast-track project should be a turnkey

project . The Corps should prepare a total turnkey management package with which to approach the customer

(the user of the facility) . Under this concept, the

Corps would present a proposal based on the user's

specifications . Once the proposal was accepted, the

Corps would have complete responsibility for and

authority over all aspects of the project : design,

execution, funding, etc . When the project was complete, the user and the Corps would hold a joint

inspection and punch list . When the facility was

accepted, the Corps would hand over the keys and

walk away .

A turnkey arrangement would have many benefits : the

Corps would perform at maximum efficiency the construction mission that it is trained to do ; changes

would be kept to a minimum, resulting in savings of

time and money ; and the management of the turnkey

project would be orders of magnitude easier than any

other arrangement .

2 . Put your monewhereyour mouth is . Considerable talk was made that the IAP was the most

important job in the Corps, but obtaining the best

people when the project most needed them was not

always possible . This applies to military and

iv

civilians .

At one time during the staffing of NEPO, we exhausted a

candidates list containing the names of 23 colonels (0-6s)

because not one officer on the list would take (or was

not meaningfully told to take) a high-risk Area Engineer

job . Some civilians were necessarily promoted a grade

or two higher than they would have been ordinarily .

The point is' that everyone expended time, much of which

was simply not readily available, to train and motivate

individuals . Incentives, such as making the military

offers as commands in name and selection and building

up key civilian jobs, are necessary . Contract Officer

jobs should not be equivalent to Area Engineers but to

construction districts or commands ; area engineer people

and organizations in districts do not equate with these

jobs . Send the best people first .

As far as the contractors are concerned, insist in contract negotiations that the design/construct contractors

(DCCs) provide their best qualified personnel and that

organization charts, staffing levels, and resumes of key

staff be provided to be part of the selection process .

3 . The boss should select his key peoPle . The

project commander should personally select his key

people and not have them issued . Build the organization

around seven to ten key people owing their loyalty to

the on-the-job-commander.

4 . Duplicate or exceed the rank of the customer in

a hinhly nnlitiral atmncnhPrPA flaw frnm the outset in Israel was the inability of the original NEPO

"manager," through inadequate rank, to control his own

destiny with two extremely tough brigadier generals (the

user, MOD BG Bar-Tov, and the customer, USAF BG Hartung)
and two extremely tough, competent 0-6 Area Engineers .

Put a general officer in charge from the outset .

5 . Consider making the Cor s the Program Manager

for DOD . The USAF formed a liaison team at the site

to coordinate with the IAF site engineer that frequently got into the Corps business of construction .

Given the sophistication of the user, who knew what

he wanted, the Corps could have handled the functions

at the program level .

6 . In a foreign country, the Project Manager

must be a member of the U .S . Embassy/Country Team .

When the Corps is given a major construction mission

in a foreign country that by its very nature impacts

a broad range of the host country's infrastructure,

it is imperative that the Corps' Project Manager be

a member of the Country Team.

7 . Stay till done . . Key individuals must commit

for the duration . Before the job was 10 percent complete, Ovda had gone through four changes at the top .

8 . The fire fighter must be able to direct the

water hoses . NEPO should have reported from the start

as an operating element of OCE . If Washington is to

make decisions that affect the mission or if Washington must make decisions to ensure the timeliness, there

must be clear lines to OCE .

In my judgement no division would have been capable of

proper NEPO support, for- It quickly deteriorated to

personal involvement of the Division Engineer without

v

EXEWTIVE OVERVIEW

involvement of his staff . In any event, if a general

officer had been present at the start, then NEPO would

have been a separate operating element . Huntsville and

CEBMCO are early precedents of direct lines to OCE ; MX

is a current one.

9 . Temper the military sharpness of the objective

with tried civilian managerial competence . One very

bright spot in the IAP was the decision to place a

civilian deputy at each site . The decision should have

been made from the outset and the military deputy

concept abandonded . High-level civilians at the area

headquarters must owe complete loyalty to the Project

Manager .

It has been readily apparent that we in the Corps, both

military and civilian, have an experience gap when it

comes to cost-plus contracting. This gap should be

addressed in the OCE-sponsored traininq arena

10 . Consolidate contracting officer responsibility

at one location . This was done at first but then was

moved to the work locations in order to streamline the

decision making, to enhance the role of Area Engineers,

and to honor a commitment of the ex-Chief of Engineers,

General Jack Morris .

The decision to consolidate contracting officer functions

at headquarters or to leave at an Area Office should be

made by the commander based on his assessment of Work

load, past experience, and ability of the Area Office

staff .

11 . Cash in on economics of scale . Use of one DCC

would have saved huge sums of money and time and would

have been at least ene-order of magnitude easier for the

Corps to manage . There were redundancies in every func_i

tion, but there were notable inefficiencies
EXECUTIVE OVERVIEW

in procurement, management information systems (MIS),

inventory control, design, and maintenance .

The seeming advantage of having a fall-back contractor

should one fail or be terminated evaporates when tempered with the sure knowledge that the Corps could not

afford to have its contractor fail or permit its contracting officer or NEPO commander to terminate a DCC .

Two contractors simply do things differently and seeming inconsistencies were not easily explainable without

expending considerable effort . These inconsistencies

resulted in many of the problems with MOD and continued

to be a major source of Israeli nonconfidence and suspicion .

To prove this point, one only has to recall the episode

with MIS differences involving Under Secretary of the

Air Force Chayes and its long grueling and acrimonious

aftermath which involved USAF auditors and a DAS team

in Israel for several intense months .

I recommend with 20-20 hindsight vision that NEPO

should have had one constructor ; one design contractor

(the constructor did not control the design portion of

the DCC anyway), which would furnish the procurement

for sites and provide quality control ; and one contractor to provide logistical support for both sites and

for Tel Aviv headquarters . If any professional or

technical augmentation was required for the Corps, it

should come from the design contractor .

I estimate the three-package concept savings very

conservatively at $50 million . There is no way to

estimate indirect costs and management time expended

in explaining to the user and to the customer the

contractor differences in such areas as estimates,

vi

costs, expenditure rates, accounting, and procurement

techniques

12 . Obligations follow expenditures . Management

of cost contracts must track obligations as the basis

for cost management. Cost reporting must be on an

obligation base that relates to a work-breakdown

structure/chart of accounts tied to the contract budget estimate .

Control of costs will not be possible if this front-end

step is avoided or neglected . Actual expenditures must

be related to budget elements, unpaid costs, and estimates of remaining obligations -- if these cannot be

tied together, cost management will be severely impaired if not impossible .

Productivity analysis must be measurable thru the financial reporting system . Cost of manpower for specific

trades must be identifiable and comparable to budgets .

13 . Specify the MIS system. There was no requirement for a standrd MIS ; there must be . The MIS must

be responsive to all aspects of management needs : upward

reporting, baseline schedules, cost tracking and control, design, and procurement .

We cannot afford to rely on DCC promises to deliver a

useable system or to use "their" system ; they may prove

unresponsible or unreliable .

The one major problem from the beginning and throughout

the IAP was the credibility of the MIS . Later problems

were the differencies between DCC inventory control

systems and the lack of an automated system .

14 . Organize and manage from the start to control

the design-procure-construct disconnect . In the origi-
nal authorizing documents, the management and control

structure as well as detailed relationships of the user,

customer, and construction agency must be established

and agreed on in a great specificity before starting .

Once control erodes, it is difficult or impossible to

regain .

The construction agency should have a voting member on

the Program Configuration Control Board . Without it,

engineering change proposals quickly get out of hand .

A fixed-price contractor would not allow the user to

make unbridled changes ; the construction agency must

act as the surrogate -- in our case, the DOD Program

Management Office was unable to do this .

Avoid letter contracts, which improve the contractor's

bargaining position, unless absolutely necessary .

The RFP for CPFF solicitation should include requests

for fee and-home office G&A proposals . This is essential to avoid protracted negotiation due to lack of

contractor definition .

Include an Appendix "i" and do not rely on the work of

the contractor to control costs . Task directives are

required .

Confidentiality of program amounts must be maintained

to ensure competition and fairness to the Government

during negotiations . Negotiate in the U .S ., not at

the job site ; settle on the product before we buy .

The design element should be a separate contractor ; .or

if design must be controlled by the DCC, the design

firm must be a full member of the consortium . The

designer should gear up rapidly enough to do the design, not the host country . Insist on USCE/USAF specifications, if politically feasible . Freeze design

when approved for construction except for fatal

errors ; "fatal" must be rigidly defined and must be

vii

fatal .

Start BOMB immediately and actual procurement at about

the 60-percent design level . Stress DAR flexibilities

rather than its inflexibilities . Fully utilize options

of negotiated procurement .

See paragraph 10 .

15 . Simplify as much as possible . Although there

are rigid laws and rules, there must be some way of

cutting through the bureaucracy to get on with the job .

When using foreign funds, procedures should not require

adherence to US DOD and DA regulations in all instances .

This simplification is an absolute must to avoid antiquated relations .

Providing contractors with simplified guidance where

possible concerning travel employment agreements,

(Termination notice provisions) work requirements will

insure full commitment to the project .

16 . Get back into the quality control (QC)

business . General Morris correctly stated .that "long

after the airbases are built on time and below budget,

all that the customer will readily remember is the

quality of the airfield and its facilities ."

The DCC, the Area Engineer, and the commander and his

staff are overwhelmed with finishing on time -- time

is always of the essence at least until the job is

done . "Quality is good enough" and "we know what we

are doing ; leave us alone" are familiar DCC expressions .

See paragraph 10 .

It is imperative that the Corps keep continual pressure

on and monitor the contractor's QC procedures .

EXECUTIVE OVERVIEW
EXECUTIVE OVERVIEW

The Corps' quality assurance (QA) functions must be

tuned to perform essential monitorship and supervision.

Combining QA and QC under Corps control should be carefully reviewed and considered prior to contract formulation .

17 . Get more leverage from a management support

contractor, if one is needed . Prevent layering and

duplication of functions with Corps personnel ; provide

for and insist on deliverables . Avoid "body shopping ."

Insist upon technical professionalism in key management positions ; the . general manager must be an

engineer .

18 . Begin phase-down/phase-out and closeout

planning early . Phase down will be driven by construction progress, but manpower requirements must be continually monitored by the Corps to provide impetus for

phase down . Plans should be formulated around flexible

milestones and frequently revised and updated as initial uncertainties are eliminated .

OVERALL : The construction agency (the Corps), the customer

(the USAF), and the contractor must share identical perceptions of productivity and efficiency, quality control, safety,

and morale . The prime obstacle to overcome and re-overcome

is lack of cooperation . We cannot afford adversary relations .

Synergism among all players is key ; this goes far beyond

organizational efficiency or effectiveness .

viii

19 . Have integrated procurement/inventory control systems that will facilitate property transfer

during phase down . Property transfer should begin

early and be accomplished concurrent with construction . Accurate inventory control is essential to a

smooth project closeout .

20 . Recruit a good contract-closeout team .

Select the contract-closeout location early and begin

recruiting the closeout team so that they can go into

action while all the knowledgeable players are still

in the game . The closeout team can begin to identify

and address known contract-closeout issues while construction is still underway .

- - BG(P) John F . Wall - -

Commander, NEPO
The lessons learned by the construction agency (the Corps)

are sorted by program phase :

•Planning/mobilization

• Design and procurement

• Peak construction activity

• Phase down/phase out and

planning for closeout

•

Recommendations

Each section is preceded by a table of contents .

ix

REPORT ORGANIZATION
CONTENTS

Page

Put your money where your mouth is . . . .

.	3

•

Give project the necessary priority

V

• Allow fire fighter to direct water hoses

• Commit best people in the proper numbers

Organize and manage from start to control

the disconnect	 4

•In foreign country, make Project Manager

member of U .S . Embassy/Country Team

•

Consider making Corps Program Manager for DOD

• Effective user/customer/construction agency . relationship

-essential

• Program Configuration Control Board early requirement

I Management and control structures must be Corps defined

J Prepare RFPs with scopes of work that include prime

mandatory requirements	 5

•

If design controlled by construction

contractor

• Three-package concept for fast-track

construction projects cumbersome

• Management support contractor carefully approached

• Life support contractor separate

Define management control system	 7

•State-of-the-art system

• Design requirements

• Specifications

(Continued)

1

PLANNING/MOBILIZATION

"Allow Fire Fighters to Direct

Their Water Noses ."
PLANNING/MOBILIZATION

Select contract type and contractor and

develop estimates for negotiations	 9

•Select type of contract

• Select contractor

• Negotiate terms of contract

Staff key positions carefully and for the duration 	11

•

Construction agency

• Contractor

Establish standard workweek	 13

Page

•Ensure judicious use of overtime

• Verify standard workweek

• Consider system of time-related incentives JYou can't play safety catchup if substandard

equipment i s procured	 14

•Define safety standards in RFP and contract

• Make Safety Officer an early hire

%Effective security and investigative support at

start of project	 15

•Address authority and jurisdiction issues

• Make security a separate prime contract

• Have design/construct contract stipulate

security program if needed

• Have security and investigative support units

in place before project initiation

• Bring MPIs onto team from beginning

• Determine necessity to arm security personnel

Consider a functional organizational structure

for the Area Office	

16

2

I
Give the project the necessary priority

Commit best civilian and military people in the proper

numbers

•

Avoid spending too much time in training people

• Use incentives such as making the military jobs

commands and build up key civilian jobs

Make general officer the Project Manager

V/Put your money where your mouth is

3

PLANNING/MOBILIZATION

Allow fire fighter to direct the water hoses

•

Have project report as an operating element of

OCE

• Give project clear lines to OCE

• If OCE makes decisions that affect the

mission

• If OCE must make decisions to ensure

timeliness
PLANNING/MOBILIZATION

In a foreign country, make Project Manager member of

U .S . Embassy/Country Team

Consider making Corps Program Manager for DOD to

•

Create direct relation with user

• Reduce number of bosses for contractor

User/customer/construction agency relationship

• Establish and agree upon before project starts

• Seek agreement on ground rules for user's participation in project

•

Construction agency must

• Have complete control at project level

• Have sole responsibility and authority to

administer contracts

• Establish initiative to disapprove selection or to fire any level of contractor's

personnel

Program Configuration Control Board

•

Have Project Manager (head of construction

agency) as voting member to limit number of

engineering change proposals (ECPs)

• Have Project Manager representative

senior full member (heads of user and

customer agencies)

Organize and manage from start to control

the design/procure/construct disconnect

4

Management and control structures

•Arrive at time and cost goals that the user,

customer, and contractor will accept

• Agree with user and customer on reporting

details and frequency

• Emphasize cost control in dollars and manpower from beginning

•Establish budget definitions and requirements (integrate into management control

system)

• Agree on cost-transfer policies and procedures, incorporate into contract, and

apply uniformly

•Tie organization into management control system

• Ensure all related elements have defined

responsibility for system interface

• Design all interfaces to produce defined

benefits to organizational elements

• Establish and agree on task directive proposals

by contractor

NOTE : For the TAP, the user was the Israel Ministry of

Defense ; the customer was the U .S . Air Force ; and the

construction agency was the Corps of Engineers .
• Have design element as full member

sortium

of the con-

•

Require demonstrated experience in Government

procurement procedures

•Specify the following if project is OCONUS

•

Demonstrated experience in procurement

logistics

• Cost/production experience data for predominant work-force nationality

• Ability to establish and maintain incountry management control system

• Require commitment of organization and managers

by name dedicated for term of contract and

write employee contracts to ensure this happens

• Include requirement for general staffing

plan to be approved by the Corps

5

PLANNING/MOBILIZATION

Have management team prepare Requests for Proposals (RFPs) with

scopes of work that include prime mandatory requirements necessary

for program management to use in selection considerations

If design is controlled by construction contractor (as* Must plan to bring competent QC resources

was intended for NEPO) on board early in sufficient numbers and

time-phased to match increases in construction forces

•

Define internal audit requirements

If management and life support contractors are required

• Commit fully and specify deliverables (task

directives)

• Require professionals in key positions

• Identified by name and qualifications with

general manager an engineer

• Committed for term of project

• Recognize that DCCs are not experts in hotel

management/life support any more that life support contractors are design/construct managers

• Realize that alternative is to staff with Corps

personnel, which probably will not be readily

available

NOTE : Alternative three-package concept is given on

the following page .
PLANNING/MOBILIZATION

Consider three-package concept for fast-track construction projects

•Have one design contractor and one constructor

for all sites and one logistical support contractor for field and headquarters . This will

•.Cash in on economics of scale

• Simplify management

• Improve user/customer/construction agency

relationships

• Include any professional or technical augmentation needed by Corps in the design contract

•

See item 11 in the EXECUTIVE OVERVIEW for the

background discussion of this alternative'

6
Require Corps/industry state-of-the-art system with

essential technical expertise

Design system to provide cost/schedule/finance control

required by user, customer, and construction agency

•

Must be responsive to all aspects of management

needs

• Upward reporting

• Baseline schedules

• Cost tracking or control (dollars and manpower

• Design

• Inventory control and tracking (subsystem

cost interface)

• Describe management control system

in detail

System specifications

• Specify manageable level of detail

• Define

• Process/form of management review

• Elements for real-time management

• Appreciate that up-front expenditures on system

are essential

(Continued)

/Define management control system (budget-scheduleprogress-cost integration)

requirements

7

PLANNING/MOBILIZATION

System specifications (continued)

• Require specific system hardware selection as

initial decision (must rely on Corps planning

and preparation)

•

Specify user interfaces

• Define system interfaces if required

between DCC's and Corps' systems

• Specify work-breakdown structure for estimating, budgeting, scheduling, direct manpower

requirements by craft, progress reports, and

cost-control needs

•

Ensure simple input (preformatted) and flexible

with predefined outputs

• Require input/output by terminal in system

user's office/work area

• Identify printout sorts desired at whatever

time intervals considered necessary

• Have capability to make what-if analyses with

schedule, crewing, and obligation vs funds flow

at construction agency/contract management level

CAUTION : Do not rely on DCC's promises to deliver a

useable system and do not allow use of "their"

system that may or may not be responsive or

reliable .
PLANNING/MOBILIZATION

Require work-breakdown structure/chart of accounts to

control costs

•

Relate actual expenditures to • Have responsive financial reporting system

• Budget elements * Measure and analyze productivity

• Unpaid costs * Identify cost of manpower for specific

* Estimates of remaining obligations

trades and compare to budgets

EXPENO1ttlRE-OBLIGATION ANSLTSIS FOR ISRAELI AIRBASE PROGRAM

Istimate to Complete Ovde A$rbase as of 30 April 1982

Note : Eoamoly only ; entries are not complete.

8

S 411) ions

Budget Elements

Actual

Expended.

Accruals and

Onllquldalet ,bllast ions

Current

Obl'isatlons

Somaining

Obligations

Total

Requirement

Labor Unpaid April Labor 3 .0

Accrued Burden 2 .6

127 .8 5 .6 133 .4 4 .3 137 .7

Life Support Food Service 0 .1

Materials Portland Cement 0 .1

Asphalt 0 .4

Open Purchase Orders 0.8

101 .3 1 .3 108 .6 9 .3 198 .9

Capital 63 .9 Rental (Open POt) 0.2 64 .1 3 .11 51

Transportation 22 .0 Estimated Obligations 0.1 22 .1 3 .1 22 .2

Miscellaneous Open Purchase Orders 0.4

SOB10T*i. 399.2 11 .3 431 .5 6 .5 338 .3

Fee 32 .5 0'.S 33 .3 1 .3 34 .3

Total Obligations 452 .7 11 .8 464 .5 7 .S 472 .3

Contract Closeout 1 .1

Total 4equlre.,ent 473 .1
V/Have management team select contract type and contractor and

develop Government estimates for negotiations

Select type of contract appropriate for projectspecific constraints

•

Avoid letter contracts whenever possible

• Include cost controls

• Use specific task directives

• Use fixed-price contracts when practical

• Consider cost-type contracts in following order

of precedence

• Cost plus incentive fee

• Cost plus award fee

• Cost plus fixed fee (including incentive

payments for critical elements)

• Provide for converting a cost-type contract to

a fixed-price contract if conditions that led

to use of cost type cease to exist

• Consider combining multiple projects into a

"package deal" if there is more than one project in program

Select contractor

• Use checklist to compare prospective contractors (give weight to prime mandatory requirements)

(Continued)

9

PLANNING/MOBILIZATION

Select contractor (continued)

i Emphasize business, administrative, and logistical skills as well as engineering and construction know-how

•

Consider each applicant's present capacity and

those assets that will be dedicated to the

project

Negotiate terms of contract

•

Do not allow user to manage or enter negotiations

• Keep program amounts confidential during negotiations

• Maintain maximum competition possible

• Negotiate within scope of work to get contractor able to comply with requirements of contract in manner expected by the Corps

• Retain consultants if Corps expertise is not

available to review the following

• Minimum job standards

• Equipment needs

• Contractor's logistical organization

(Continued)
PLANNING/MOBILIZATION

Negotiate terms of contract (continued)

•

Have explicit criteria, definitions, and entitlements in employment contracts

• Reduce fee if guidance is provided for preparation of policies and procedures manual (see

RECOMMENDATIONS)

• Require basic manual for Corps approval in

time to influence action from outset to

• Lower cost

• Improve management efficiency

• Avoid misunderstandings between Corps

and contractor

• Consider incentive payments to encourage

contractor to develop and refine manual

based on project experience

• Negotiate in the U .S ., not at the job site

•Settle on product before you buy

10
V/Staff key positions carefully and for the duration of the

project or until no longer needed

Construction agency

• Have fast-track cadre (permanent persons when

possible) to participate in all actions until

permanent individuals are on board

•

Allow Project Manager to select his key people

• Select 8 to 10 good people as a nucleus to

build around

• Recruit the best people

• Ensure personnel system is fully sup orting recruiting effort (high priority

• Build organization around individuals who

owe their loyalty to the on-the-job

commander

• Consider tempering military sharpness with

tried civilian managerial competence

• Officer Project Manager/civilian deputy

• Officer Area Engineer/civilian deputy

• Bring key staff on board at headquarters early

• Committed for duration of project

• Participate in project planning, personnel

selection, and contract preparation

• Deploy to the project already working

together as a team

11

PLANNING/MOBILIZATION

•

Develop time-phased general staffing plan

• Make fully qualified hires at pace based

on staffing plan

• Identify positions necessary for institutional memory or for life of project for

other reasons

•

Establish accompanied status where necessary to ensure continuity

• Include experienced personnel necessary

for proper administration and surveillance of contractor's activities

NOTE : Key civilian staff includes the Deputy Project

Manager; Deputy Area Engineer ; Chiefs of Engineering, Construction, Resource Management

Office, and Purchasing and Contracting ; and

Legal, Personnel, Safety, and Transportation

Officers .
PLANNING/MOBILIZATION

Contractor

•

Require senior management personnel to be part

of contractor's permanent staff (at least a VP

and a "comer" should be on the job)

• Have contractors submit resumes of persons proposed for key positions and operating officials

for Corps approval

• Organization chart with persons and positions identified

• Persons committed for full time positions

are required to complete project

• Obtain plan for phased staffing of effective

key positions down thru

• Superintendents

• Second- and third-tier managers

• Hold contractor to an approved general staffing

plan

• Ensure slow start and then crescendo

• Avoid expensive inefficient early hires

• Require experienced personnel in all positions

of foremen and above

• Specify labor contracts that have procedures to

allow short termination periods for laborers

• Long 30-day notices result in periods of

inefficiency

• Highly desirable alternative would be 1-

week notice with 2-weeks severance pay

1 2

•Carefully review and periodically monitor personnel policies for agreement with contract

• Specify exactly the basis for payment of

wages and benefits (classes of air travel,

Fly American, TDY, etc .)

•Analyze special entitlements for compliance with intent and spirit of contract

• Monitor labor relations to ensure frugality of benefits, efficient hiring and

firing, and adherence to job qualifica ,

tion requirements

•

Dedicate position for position and pay

specialist in Area Office Resource Management Office to accomplish the above

•

Establish policy on contractor use of Government owned vehicles and enforce rigidly

• No private or unauthorized use of administrative vehicles

EXAMPLE : Superintendents cannot have pickup

trucks for personal use as they would have

with contractor-owned vehicles .

•Specific policy on recreational use of

vehicles

• Payment for fuel and repair of damages

• Equal access for all employees

• Keep key people overseas until detailed first

cut at contract closeout is accomplished
Ensure judicious allocation and management of overtime

work

•

Agree with contractor on standard workweek during contract negotiations

• Give contractor management authority to approve

specified maximum excess amounts of overtime

(1-3%) in unusual short-term situations

Verify standard workweek in consideration of onsite .

conditions

•

Specify ground rules at the outset

• Avoid reducing allocated overtime, which will

affect employee morale and cause productivity

to drop

•Identify contractor and Corps personnel who must

work on same schedule

13

V/Establish standard workweek that balances need to attract

qualified personnel with basic cost/time considerations of

productivity

PLANNING/MOBILIZATION

Consider system of time-related incentives (would require regulatory relief)

•

Have contractor establish system of incentives

for work in excess of upper limit of normal production standard -- piecework salary incentives

•Get Contracting Officer's approval

EXAMPLE : Allow contractor to pay certain crews rate

earned for standard workday established for the project if they complete amount of work in excess of upper

limit of normal production standard established by the

contractor and approved by Contractor in less than the

standard time .
PLANNING/MOBILIZATION

Define safety standards in the RFP and the contract

•

Personnel

• Hardware and personal protective equipment

•Establish minimum equipment-maintenance

program

• Dictate accident-reporting system with specified time limits

• Identify reporting channels and details

such as forms, etc .

• Document penalties, liability, and other

consequences

You can't play safety catchup if substandard equipment is procured

14

Make a professional Safety Officer with an engineering/

construction background an early Corps hire to

•Assist in procurement of recreational and administrative vehicles that meet Department of

Transportation standards

•Monitor contractor's safety program, operating

procedures, and equipment

• Institute safety programs such as defensive

driver training adapted for in-country legal

and road conditions

• Sponsor basic 200-word second-language training

if necessary for workers to read operating and

safety instructions for equipment, tools, and

vehicles
Address authority and jurisdiction issues in Countryto-Country or Status of Forces Agreement

•Determine Justice Department involvement in

criminal prosecution of American citizens

arrested in host country

•

Advise employees of host country police and

customs authority before deployment

Make security a separate prime contract with Corps

Chief, Security/Provost Marshal as Contract Officer

• Have contract security elements directly controlled and supervised by Corps Chief, Security/Provost Marshal

•

Ascertain all security actions performed in

accordance with Corps security requirements

Have design/construct contract stipulate security

program if needed to safeguard classified documents

•

Authorize a supervisory agent

• Specify penalties for failure to comply with

control and safeguard regulations

15

/Effective security and investigative support should be

available at start of project

Ensure both security and investigative support units

are in place prior to project initiation

•Make Chief, Security/Provost Marshal a Special

Staff Officer reporting directly to Project

Manager or his deputy

• Include Physical Security/Crime Prevention

Specialist in organizational planning

Bring military police investigators (MPIs) onto team

from beginning of project

•Retain same MPIs for term of project

• Define MPIs' authority and provide proper

support

• Have MPIs report directly to the Provost

Marshal

Determine if in-country conditions make it prudent to

arm security/investigative personnel

•Gauge possibility of life-threatening

situations

• Evaluate increase of terrorist activities and

need to protect commander, VIPs, and dignitaries

• Increase personal security and counterterrorist

training for personnel

PLANNING/MOBILIZATION
PLANNING/MOBILIZATION

Systems'

Support

Project

Management

Support

Office

Special

Projects

Consider using a functional organizational structure at Area

Office to support the fast-track time/quality/cost concept

Contract

Administration

ADP"

Operations

"Can Be Corps System or Contractor Operated

Note : This suggested structure would be consistent essential element to ensure and coordinate the use of a

with establishing a field organization led by a systems approach in the Area Office's operations . The

colonel that relates to a Corps District . The asterisks mark the organizations that should fully utiProject Management Division is considered an

lize systems for their functions .

Cost/Schedule

Branch

Field Engr

Branch

(includes QA)

I

Construction

Division

Area Engineer

Deputy Area Engineer

Fiscal/Travel

Branch

16

Technical'

Engineering

Branch

Resource

Management

Office

Program Analysis'

Cost/Budget

Branch

Safety

Security

Procurement'

Branch

Internal

Audit

Branch

I

Procurement

and Supply

Division

Supply'

Branch

Procurement & *

Logistics

Branch

Office of

Administrative

Services
CONTENTS

Page

/Require integrated design engineering/

construction engineering effort	 18

•

Manage design/procure/construct interface

• Define scope and manpower requirements for

design

• Identify constructability problems and

propose design changes

• Provide incentives to have DCC gear up

rapidly to design project

• Sell DCC on Corps perception of QC/QA

effort

Vuse

• Consider having Corps responsible for QC/QA

Make maximum use of preengineered buildings

'V Use fast-track procurement methods and tie

procurement to construction schedule 	 20

•

Centralize procurement functions

• Determine documentation required for customs

clearance

• Require integrated procurement/inventory

control systems

• Start BOMs immediately and actual procurement at 60%-design level

• Meet DAR norms for purchasing methods

• Define and monitor scope of O&M documentation

1 7

c:::]

4r ot-u

DESIGN AND PROCUREMENT
DESIGN AND PROCUREMENT

Require an integrated design engineering/construction

engineering effort

Manage the design/procure/construct interface

•

Simplify as much as possible

•

Find ways to cut thru bureaucracy at

beginning to get on with the job

• Emphasize strengths of system, not

weaknesses

• Get contractor to recognize and manage interface thru use of management control system

• Ensure that Corps systems are used to tie,

related planning and scheduling together

• Include project management/system support function (see su gested organization chart on page 16)

•

Recognize the coordination of separate

functions thru single system is

essential

Define scope and manpower requirements for design prior

to commencement of design activity

• Have scope that covers manhour estimates and

projections for submittal of drawings, specs,

and BOMs (consider procurement and early construction needs)

• Match manning requirements (disciplines, duration, etc .) with projected manhours for preparation of design documents

1 8

Identify constructability problems and propose necessary design changes based on knowledge of construction

techniques

Provide incentives to have DCC gear up rapidly enough

to do the design

•Require designer to provide in-country liaison design and stateside design support

• Use U.S . specifications and criteria

EXCEPTION : Local subcontractors who would normally use familiar local specifications

•Design with economical materials for construction location

• Be aware of user requirements to operate and

maintain standard U .S . systems

•Specify test methods and reporting procedures

for QC

• Freeze design approved for construction except

for rigidly defined "fatal errors" that must be

fatal to the purpose for which the facility is

intended

Make maximum use of steel or precast preengineered

buildings or components

•Make decisions early and order standard items

• Identify, design, and order other items as

design progresses
Sell DCC on Corps' perception of QC/QA effort

•

Strengthen contractor QC requirements

• Keep continual pressure on contractor and

closely monitor QC procedures

• Put monetary teeth in penalties for failure to

meet QC specifications

1 9

DESIGN AND PROCUREMENT

Consider having Corps responsible for QC and QA

•Tune functions for essential monitorship and

supervision

• Review merits of combining QC and QA under

Corps control prior to contract formulation

• Save money

• Conserve manpower
DESIGN AND PROCUREMENT

Use fast-track procurement methods and tie procurement to the

construction schedule

Centralize and coordinate procurement functions

•

Require designer to provide BOMs early

• Establish close coordination between personnel

responsible for engineering, preparation of

BOMs, and construction (material requirements)

and procurement personnel (purchase orders)

NOTE : This coordination assumes even greater

importance when design is done at a central

location and procurement is managed from a

remote site .

•

Establish achievable and time-phased procurement goals

• Make full use of options of negotiated procurement

Determine documentation required for customs clearance

and movement restrictions of duty-free project materiel

•Train procurement and purchasing personnel

• Instruct vendors and suppliers accordingly

Require integrated procurement/inventory control systems

• Modern and flexible

• Have expert (consultant if necessary) validate

systems and integration

• Anticipate use in expediting property transfers

during phase down/phase out

20

Staff Procurement early with quality and quantity people

and move out!

•

Start BOMs immediately and actual procurement at

60-percent design level

• Identify critical long-lead-time items and procure early

• Stress DAR flexibilities rather than inflexibil itees

Meet DAR norms for purchasing methods

• Require contractor to maintain cost-analysis

capability

	 . Monitor DCC to ensure purchases are made at

fair and reasonable prices

Define and monitor scope of O&M documentation

•

Tailor extent and level to meet the minimum

requirements of user

• Start implementation of O&M scope with initiation of procurement

• Obtain vendor data with equipment and file,

properly

• Mark up as-built drawings and prepare contractor's shop-drawing index simultaneously

with construction activities
• Establish realistic turnover dates

•Look for tradeoffs between construction efficiency

and activation requirements

• Evaluate impacts on construction schedule

2 1

PEAK CONSTRUCTION ACTIVITY

CONTENTS

Pale

4 E rr in the side of conservative time estimates	22

e Make frequent expenditure and manpower projections

•Have small top-flight teams check projections

• Have contractor redevelop labor requirements at

regular intervals . • I :iclude contractor in monthly scheduling sessions

•Bring in contractor's controlling partners for

periodic reviews

• Begin early to plan how to end job

V Dk,n't stand between the hippos and the water .

. . . 23

•Keep the situation fluid

• Control cost-growth proposals

• Devote attention to equipment turnover

• Cost vs schedule vs manpower is a tough tightrope

• Promote cooperation between headquarters and the

field

Inefficiencies will occur from joint occupancy	25
PEAK CONSTRUCTION ACTIVITY

_V/1f you err (and you will), err on the side of conservative time

estimates

Make frequent expenditure and manpower projections

•

Manage by crew

• Require detailed analyses of trade-mix requirements

• Capture direct and indirect expenditures

• Get reasons for any undistributed labor

charges

Have small top-flight control teams to check

projections

•

Set up 3- to 5-man groups

• Use bright young tigers (military and civilian),

not wild-assed guys who might be misled or

intimidated

Have contractor redevelop labor requirements at regular

intervals

•

Get match of crew size and job assignments

• Make coordination of crew assignments for size

and tasks a specific responsibility and then

monitor effectiveness

22

Include contractor in monthly scheduling sessions

•

Go thru drawings and materials and labor

lists and make real-world assumptions

• Use assumptions to develop plans

• Play what if -- Pay more money or more

time? Squeeze time intervals? Who gets

hurt?

•

Encourage contractor to refine plans

• Establish firm start/finish dates

• Keep scheduling displays basic and usable --

sequenced bar charts first based upon networks

as required (both overall crewing and construction logic by facility)

Bring in contractor's controlling partners for periodic

reviews

•What's good? What's bad?

• Identify top policy items to zero in on

Begin early to plan on how to end the job
Keep the situation fluid and don't fail to meet objectives either thru over optimism or (worse) thru pessimism

•

Establish realistic schedules that are acceptable to the contractor and that meet the requirements of the user

• Make certain that the contractor appreciates

the importance of meeting or beating the

schedule

• Use projected vs actual progress to determine when schedule compression will be

necessary

• Use best crews on critical items

• Carefully evaluate impact of compressing the

schedule for or shifting crews to one facility

on the completion dates of other facilities

(i .e ., the bow-wave effect)

Control cost-growth proposals

• Do not permit user to stretch definition of

fatal error to obtain unilateral approval of -

some ECPs

•

Work diligently to minimize ECPs to avoid cost

growth and instability in the project

Don't stand between the hippos and the water

23

PEAK CONSTRUCTION ACTIVITY

Devote special management attention to turnover of

equipment and facilities as rapidly as situation will

permit in order to

•

Avoid expenditures to safeguard equipment

• Minimize manpower and time consumed in repairing damage caused during activation and move-in

Cost vs schedule vs manpower is a tough tightrope

• Require frequent regular in-depth reviews of

cost to date, forecast final cost, and completion schedules

• Evaluate progress and contractor's estimate for completion thru comparison with

independent manpower analysis and financial projections

•Beware bow-wave effects of facilities not

completed on schedule

• Continually build an audit bridge between

original and current budgets

• Use original and updated project control

estimates to monitor Area Engineer's

financial management

(Continued)
PEAK CONSTRUCTION ACTIVITY

Cost vs schedule vs manpower (continued)

•Nail down manpower and trade mix needed to

meet schedule

• Make real-world schedules in cooperation

with user

• Manage by crew

• Resist redefinition of end points by user

• Establish as fact that completion objective

dates (CODs) are best-effort estimates, not

actual completion dates

•

Manage to earlier target objective dates

than are known to be immediately obtainable

to give a better chance of meeting CODs

• Expect pressures to throw in more manpower when

a COD is in Jeopardy

• Evaluate level of production hurt by intensified efforts to complete facility to meet

user requirements

• Verify user's current requirements for

facility and ability to move in on the

specified date

•Avoid accelerating procurement and construction if user cannot move into facility

for any reason

•Avoid expensive, inefficient overtime except when absolutely necessary (six 10-hour

days may be too much anyway)

24

Promote cooperation between headquarters and the construction site

•

Have headquarters limit requests for information

• Structure standard reports to eliminate all

but miscellaneous requests

• Appreciate pressures and demands on field

office in a fast-track situation

• Keep site personnel flexible to respond to the

headquarters needs

• Respect upward-reporting requirements

• Determine if informal reporting (with or

without followup) is adequate
Vinefficiencies will occur if joint occupancy of the

project by user and construction agency is required

(e .g ., when construction site is also an airfield)

In early stages of the project establish realistic

turnover dates that

•

Can be accomplished by the construction agency

• Are acceptable to the user and the customer

• Are kept current as construction progresses

Look for tradeoffs between construction efficiency and

activation requirements

25

PEAK CONSTRUCTION ACTIVITY

Evaluate impacts of site activation, schedule workarounds, systems testing, and start-up procedures on

construction schedules

•

Determine pressures created on progress rates

• Limit competition for manpower resources

• Consider ripple effects of actions on other

crafts and progress on other facilities
PHASE DOWN/PHASE OUT &

PLANNING FOR CLOSEOUT

•

Planning for closeout of the project

should begin early

•

Provide impetus for manpower phase down

• Examine manpower phase-down plans monthly and

revise as construction requirements dictate

• Match manpower phase down closely to life

support requirements

Contract-closeout duration will be driven by

complexity of issues that remain unresolved

at construction completion	 29

•Use integrated procurement/inventory

control for property transfer

• Make selection of location for contract

closeout

• Recruit good closeout team

• Begin to address issues prior to

construction completion

26

CONTENTS

Page

/Know where you are along the path 	 27

•Intensify surveillance of remaing work force/work

• Plan for contract closeout

• Ensuree needed skills and talents of Corps' work

force are retained to finish project

Plans for closeout are driven by construction

progress and construction requirements	28
Intensify surveillance of remaining work force/work

•Release nonproductive workers

• Monitor productivity in specific detail

• Ensure all material and supplies and required

equipment are available

Plan for contract closeout

• Identify personnel for contract-closeout

organization

• Organize along the team concept : everyone

is a specialist but is ready to assist the

others as required

Know where you are along the path

2 7

PHASE DOWN/PHASE OUT &

PLANNING FOR CLOSEOUT

Ensure needed skills and talents of Corps' work force

are retained to finish project

•Plan orderly and effective drawdown

• Involk authority to waive bump and retreat

rights within subgroups

• Eliminate employee displacement (no

bumping)

• Plan end-of-project leave for key persons

so that they are available when required

• Set up Positive Outplacement Program well in

advance of phase down/phase out

• Coordinate with CONUS

• Keep work force informed and reassured
PHASE DOWN/PHASE OUT &

PLANNING FOR CLOSEOUT

V/Plans for closeout are driven by construction progress

and construction requirements

Planning for closeout of the project should begin early

(for NEPO, 18 months before construction completion)

•

Use time-phased planning driven by construction

progress for

• Property transfer and demobilization

• Contract closeout

• Administrative closeout

• Have flexible plans with milestones for

decision points

Provide impetus for manpower phase down, which must

come from the Corps, not the contractor

•

Driven by construction requirements

• Match crew size to task requirements

• Devote intensive management effort to

ensure high productivity

• Phase out unneeded skills

• Have Corps Transportation Officer monitor

transportation arrangements of phased-out

personnel

28

Examine manpower phase-down plans monthly and revise

as construction requirements dictate

•

Maintain continuous pressure on the contractor

to ensure compliance with approved plans

• Display both indirect and, direct labor requirements by months at Corps' project headquarters

• Actual

• Projected

Match manpower phase down closely to life support

requirements (including food and housing)

• Control Class I supplies (food and commissary

items) carefully

• Ensure that the pipeline is turned off at

proper time to eliminate or minimize excess

stores

• Establish cross-transfer procedures to minimize

excesses and eliminate unnecessary procurements

i
Contract-closeout duration will be driven by the

complexity of the issues that remain unresolved

at construction completion

Use integrated procurement/inventory control system for

property transfer

•

Establish proper transfer procedures early

during construction

• Make transfers concurrent with construction

• Emphasize accurate inventory control throughout

the project

NOTE : This is the key element for effective property transfer in the final stages of the

project .

Make selection of location for contract closeout (CONUS

vs in-country)

•

Use cost analysis as a major factor

• Determine early in project

29

PHASE DOWN/PHASE OUT &

PLANNING FOR CLOSEOUT

Recruit good closeout team

•Select early

• Resolve uncertainty of closeout duration

when possible

• Establish reemployment rights and priority

placement guarantees to attract and retain

quality people

Begin to address issues prior to construction completion while all the knowledgeable players are still in

the game . Issues will include

•

Contract administration

• Property inventory and transfer of equipment
CONTENTS

Page

Initiate developmental research	 31

•

Management control system

• Guidelines for facility planning

and design

• Standard lists of construction

material

• Model contractor's policies and

/procedures manual

/Develop cost-plus contract training program	32

V Retain NEPO information for future reference	32

3 1

RECOMMENDATIONS
RECOMMENDATIONS

Initiate research to develop the following :

•

Management control system

A system should be developed that is responsive on a

near real-time basis from the beginning of a project .

It should not only track what is going on but should

also be designed to produce the facts early enough to

influence the action . Data and information should be

accessible so that evaluation of progress and costs

could be related to plans and budgets .

The system should include both the hardware (a mini

computer with interactive capability) and a relatable

work-breakdown structure that could be tailored for

special projects -- construction of airfields ; rapid

deployment bases, or locks and dams in a foreign

country as well as construction projects in remote

locations in the U .S . The package should include a

set of DAR specifications for a cost-plus or a fixedprice contract.

The objective of having the system is to require a

contractor to comply with a specific set of starting

rules so that his cost and construction planning and

activities are integrated and can be monitored and

evaluated in a manner contributing to better project

management .

•

Guidelines for facility planning and design

for a temporary construction camp

Guidelines should be developed for the construction

and erection of a temporary construction camp at remote locations, together with office and life support

3 2

facilities, and including layout and design of site

utilities . The objective would be to begin layout and

construction of utilities concurrent with competitive

procurement and shipment of prefab housing and support

facilities from applicable suppliers .

•Standard lists of construction materials

Standard lists of construction materials should be developed for typically sized facilities based on available material resources for various climatic conditions

locations, and shipment methods . Guides should be included as to feasible alternative materials based on

site conditions and locations . The list could be used

to initiate early procurement and construction before

completion of design .

•Model contractor's policies and procedures

manual (PPM)

A model PPM should be developed and furnished as a

guide for any DCC for a fast-track cost-plus project

for use in developing a project-specific manual . The

model manual should be flexible enough to be of use to

a full range of contractors from one who has few if any

recorded policies and procedures to the one who already

has much of the input for a PPM .

Availability of the model PPM plus the PPMs of the NEPO

contractors (see page 32) would make it possible to

have a project PPM approved and in effect early in a

construction program. The help provided would be considered in negotiating a reduced fee .
Develop cost-plus contract training program

The IAP showed that both the military and civilian

components of the Corps have experience gaps in costplus contracting . This should be addressed by OCEsponsored training that would be required for eligibility for assignment to cost-plus projects .

Avoid reinventing the wheel by retaining NEPO contractors' policies and procedures manuals for future

reference

This would capture the problems solved and the procedures developed by the contractors . These documents

are too voluminous for routine printing and distribution . If they are required for contract negotiations,

copies can be purchased for the cost of reproduction .

Requests should be addressed as follows :

Commander and Director

Attn : EIAC/EL

U.S. Army Engineer Waterways

Experiment Station

P. 0. Box 631

Vicksburg, MS 39180

RECOMMENDATIONS

NEPO Information

Air Base Constructors*, "Integrated Manaqement Plan,

Ramon Air Base, Israel," Internal Working Document

EL-82-7, May 1982, on file at the U .S . Army Engineer

Waterways Experiment Station, CE, Vicksburg, Miss .,

for the Near East Project Office, Tel Aviv, Israel .

Negev Airbase Constructors**, "Policies and Procedures

for Construction of Ovda Airbase, .Israel," Internal

Working Document EL-82-8 (Volumes I-VI), May 1982,

on file at the U .S . Army Engineer Waterways Experiment

Station, CE, Vicksburg, Miss ., for the Near East Project Office, Tel Aviv, Israel .

* Guy F . Atkinson Company, Dillingham Corporation, an(

Nello L . Teer Company, in association with Air Base

Consultants .

** Perini Corporation, Harbert Construction Corporation, Paul N . Howard Company, and Louis Berger International, Inc .